The Bridgeport evening farmer., 1909-01-15
THE QUESTION OF
 FIRE INSURANCE
An Interesting Discussion of the Subject by Firm Member of zaImon
 GOodSell X Co.

AUuiplcA StudiIUuS W HIGH uOVtFM DetcI' '
 mination of Rate and Rating in Cities
 Like Bridgeport - Local Conditions Emphasized.
 Before the board of Trade last even- ing Charles A. Nichols of the Zalmon Goodsell & Go. gave an interesting and instructive address on the subject of fire insurance which was listened to
 with the closest attention by the mem bers present. MT. Nichols showed a
 mastery of the subject and his array
 of facts and figures proved most help full. The full text of MT. Nichols re-
 marks follow:
 l Fire insurance is so closely identi- 1 fled with the commerce of the world that it may safely be asserted that the i branches of business with which it forms a component part are lnnumer- able. and without it the magnitude of 1 business transacted would be very
 much curtailed and many an enter prise now readily embarked in would never be attempted.
 Tt means safety and indemnity in case of fire to the capitalist, ~-Otection to the merchant and manufacturer in Lu0lT many ana Vdr10Q 0nC0TpT1SGS, duu security to all classes.
 We occasionally even in this day,
 meet with persons who look "-~on in surance as a scheme for personal az grandizement and profit of those who
 are in the business and they are not always confined to the ignorant classes,
 but the merchant and manufacturer and successful business men of to-day fully understand the importance of in surance. and not only do they keep their own property fully protected ill this manner. but also insist upon all with whom they have business inter course and to whom they extend any line of credit being fully protected by insurance.
 '"The phases of this great question are many and complex and 1t is not our purpose to discuss it in general, but to take up the consideration of rates and rating and look at our con- dttions. locally along these lines. That matter of rates is, aside from the moral hazard of a risk. of the utmost importance to the business of insurance. and these two questions. to great extent. are the foundations of the security afforded by the companies to their policy holders. 'The fire insurance world has for years been endeavoring to. solve this question in such a manner as will be equitable and just to all the interest and communities involved.
 "It is absolutely necessary that the companies. in order to extend security and protection to those who hold their policies must have adequate rates for carrying all risks which they in the natural order of business are called upon to assume, and it is safe to assert that no company can anOrd to insure property at less rates of premium than the experience of years demonstrates are co1npenSating.
 "The business of insurance is to in- sure property at such rates of premium that the annual receipts will not only pay all the losses and expenditures of the company but also make the busi- ness profitable to those who have in vestel their money in the capital of company.
 This business is not a mere lottery or game of chance but a legitimate one in which some of the most experi- enced and brainy men of this day are engaged and in which millions of dol lars are invested. and it must be made profitable or else the security offered and the indemnity afforded are so only nominally.
 There are many conditions which have their bearing on the proper rate to be charged for the same class of risk in various cities. such as condi- tions of the fire department and fire dldTIQ SySLEnl, SlZG dllu source O1 WdC0T supply, width of streets and general lay of the 1and.' i. e. whether on level gr ound or on hillsides, municipal regu- lations controlling storage of inf lm- ables and explosives and general eiec- trical installations and conditions.
 'NThen, there are the conditions wi ich influence the rates of the differ ent classes of risk in the same city. among which are the construction of the bu1d- ing, it's occupancy, outside and inside, exposures and provisions for internal protection.
 ''The occupancy of building is treated as of threefold character. =.
 First. with reference to its ability to ignite easily. Among the stocks of this character would be furniture, oils, drugs, etc.
 second. with reference to it's fur nishing fuel for intense combustion, likely to destroy the building and it's contents as upholstery, woodworking, furniture warerOoms. etc.
 Third. with referenceto it's own sus- ceptability to damage by fire. water and smoke. and a possible heavy fire loss resulting from a very small fire. Such stocks as millinery. toys, tobacco, artificial flowers. wall papers and meats, dry goods and clothing would be included in this class
 Up to the present time. the rates in Bridgeport On unimproved mercan- tile buildings and exposed dwellings have been judgment rates. These rates are based on a charge of $1.00 per hun dred dollars of insurance for frame mercantiles. and 75 cents per hundred for brick Applications for the rating of a new building is made at the 1n- stance of the owner by his agent to the local rating committee of the local board of Fire Underwriters and upon the report of their inspector as to 4he proximity and conditions of adjoining property, occuDance and the other phases of the risk, before mentioned, the committee rate the risk. The Eate is then approved by the New England Insurance Exchange. the rating bureau for the companies here in New Eng land. and from it's office in Boston, promulgated to the various agents.
 "A schedule system of rating for manufacturing and improved mercan- tile risks has. after many years of study, criticism and debate, been adopted and is in use locally for the rating of factories. and other improved risks. With the proper schedule being applied to each risk, the rate on each is in accordance to it's merits or de- merits, and certainly this is the only just and equitable plan that can be adopted.
 "Ann1ication for schedule rating is