Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1910-10-01
WHY ! HAS |. |: THE COs i
INSURANCE B N [. j !: INCREASED
National Agents Associn,Ion rn,,
atcs some lscaspns for
s35{ s5 Advanced Rates,

.#F L
sit Advanced Rates. #
WITH thu a public iclamoring for a redno
ton IN fire insurance rates ana III.
dreds of agencies facing mere an
istence US farsas profits are cnnc.,,
ed. the Whole country, according Ia A.,
Ing Insurance Commissioner will,ra5
Done. is more or less perturbeu oya.
the insurance situation. AT ro,o,.
meeting of the national associa,,or Y.
local fire insurance agents rcso,u
ton; was adopted, which Mr.. Done a..
is OF Importance to the Utah readsg :
1t reads:
That Il fire Insurance costs
|. than Is necessary is admitted ~.
reasons are not generally well u,dd.
stood. Theories for Its reduction 'u s..
not wanting, but the practicu, soI,,
stion Of the problem bristles with Al.
h ficulties. vi
The greater part of the cost OF f,,o
insurance Is the losses. which co,,,S
and should be reduced one-half MI.
would lower the cost. of insurance al
least 80 per cent. Such a reduct,an
would not be Il hardship to anv ona
but distinct benefit to all. In,ur'
ance companies. their local agents ana
other representatives are doing ana
Will continue to do. more than Their
share Of the WORT .or the reduction =,
fire waste. The responsibility for M (
excessive drain upon the resource, =,
the country rests upon, the property
owners and voters. The conservation
of the. resources of tho country renre.5
sented by buildings machinery ana
merchandise. Is of even greater i'm
forests and mines. Good building
coupled with fire marshal laws. would
substantially reduced the fire waste 3
and we recommend to all state asso.
Citations the henrtiest co-open,tion IN
efforts to pass such legislation
Another factor In the cost OF fra
Insurance, and one that IS unnece,.
$sary and iniquitous. is the payment
of dishonest Losses and the over-pay.,
ment Of legitimate losses This rob.
berry of all other premium payers
amounts probably to about 20 per cent
Of the losses paid. For this part OF
the cost, the fire insurance companies
and their Representatives, IRE not re.
sponsible. It is a notorious fact that
the defense OF unjust claims by fire
insurance companies costs more than
the claims themselves, even when ths
companies win. When they lose, the
cost is doubled. The public sides with
the claimant, right or wrong so pow
erful Is the injustice Of public sent,.
ment In this matter, that SHOULD
company contest every questionable
claim 1t would soon be out Of business.
The taxes imposed upon fire. insur-
ance in excess of the amount required
fnr thu r,rc o$ ha h,,g,
ness Is not part of the cost of fire IN
surance The legislatures, instead Of
collecting direct from the property
owners this excess diverted to other
purposes. require insurance companies
to collect 1t for them by adding the
amount to 9he premium. Certainly
for this part Of the premium no one
engaged In the fire Insurance business
Is responsible. ,i4t
4 THE legislation and rulings Of the
states add considerably to tho cost Of
sible laws is that prohibiting the CO.
operation Of companies. The require
ment that eaoh company muet EN-
ploy men to do work that one set, OF
men could DO for all tho companies Is
an economic absurdity. For such I'M
necessary burdens imposed upon the
managerial or general expenses Of the
business and which add to the cost Of
fire insurance, those engaged IN the
business are not responsible. II
There is undoubtedly some e1trava-
gance in the managerial office and field
work or companies which adds q little
to the cost of fire insurance.
TN the face Of tho constantly IN
crenslng cost OF living and the general
increase OF wages in other branches Of
business, the suggestion that the wages
OF local fire insurance agents should
be reduced by n cut in the rates OF
commission for the avowed PURPOSE
OF reducing the cost of fro insurance,
without reducing the number OF un-
necessary agents and ether forms of IL
legitimate competition, is not entitled
to unqualified approval. Local agents
generally are experiencing reduction
in income because OF natural and prop
err reductions in rates and because OF
Compel tion, which Is not
Offset by the increase in insurahla val
ues. and they naturally object to a &
further reduction 50 long as aShcl, COM 4
petition exists and the cost Of living
Is increasing When risk paying -
per cent Is sprinkled and rate reduced
to go cents the agent reoeiv1as ono tanth
Of his former commission. This reduc-
ton in the agents income Is a proper
evolution OF the business to which tbs
agents make no objection. Agents 90
object. however. to the reduction OF
their Incomes because OF the nppoint-
ment OF unnecessary agents and be-
cause Of other forms of illegitfnafs
IL.
>4"Agents cannot afford to accept lower
without a. reduction in conf ri
petition, and in our opinion tho COM
mission now generally paid to agents
n some sections OF the country Is not
In adequate compensation for tho serv-'
ces expected of5then. This association
san see no Just reason why the agents
n the south and east should be caileu
lpon to work for a lower compensation 4
han that paid to agents in tho north
Ind west. We deprecate tho excessive
commissions paid by some companies IN
.ities, and we believe that the abolition z
II dual and multiple agencies Wouin IA
.nable all companies to adjust their
ole agency appointments on oas's
which would result In q reduction OF
he cost OF insurance.
1.-THE National Association OF Local
Tire Insurance Agents desires to asslse
n conserving insur4lble values. IN pre-
,entlng fraudulent claims. in reducing
I, sxatlon. In repeating laws
to-operatlon tn economical
administration. and IN eliminating IN
ustiflable expense in conducting the x
Ire insurance busine sH.