El Paso herald. (El Paso, Tex.) 1901-1931, 1913-04-05
INSURANCE RATES
ON CARS CHANGED
New Cars Can Be Insured
For Much Less Than
Cars That Are Used.

Lower rates of insurance on new
models and higher rates on secohu-
hand cars viii result from the lorna
ton of the " estern AutOmOOue Ohue!
writer's association in chicago feCTnS-
" and an alliance with the AutOIlODi4S
UnderW riters' conference, the parent
body, to be effected soon WIN INC
new organization established as a SUD
sidiary body to the conference, me
eastern schedule Of rates Will be adopt
ed and the owner of new motor car
VIII have an opportunity 10 pfOllt o.
the contemplated anna Sainatlon-
Under the new schedule the owner
Of a 1918 model viii find II 10 MS az
vantage to fOregO taking out a poIlcy
until the alliance is effected Inc, mo-
tOriSt wishing TO insure SecOhC-ll-Au
car. on the other hand, VIII save money
by doing business with an under" rite
Immediately
Present Western Schedule.
The schedule OF rates now in FORCE IN
Chicago ana the micdle west DO nDt
differnetiate between the new and the
secondhand machine For example, the
owner of a 1913 model. listed at $4,000,
who wishes TO insure against IRE aue
THEFT iOr $500. must pay rate OF : L
percent or an annual pTe1nl UNI o. So--5V-
The owner OF q secondhand car, put On
the market two years ago ana selling
then for $4,000. wishing to insure -Or
$500, pays a rate of three percent on
$500. 40 percent being deducted from
the desired amount OF insurance for de
probation. or n yearly premium OF St5.
Under the eastern schedule, To be
adopted with q few miner changes 10y
agents in this district. the owner OF the
$4,000 1913 model pays rate of II
percent or premium OF S1O-zJ on
$500, and the owner of the $4,000 sec
Oud-nand car, allowed TO insure Tor
$500, pays a rate OF Il percent or &
premium of $3.50.
Thus. the owner of the new car can
save $6-25 on his premium and the
OWper Of the secondhand car VIII lose
$3.50 by waiting until western under
writer's adopt the eastern schedule.
The eastern schedule divides insur-
ance into two classes Glass /. For
cars in the hands of original owners,
models known as this year CT EeNt
year and cars, selling as high as
$1,000 and up and as low as $500, hunt
one year prior to the current year, and
class >. all secondhand cars.
The adoption of the eastern sCn>oule
will be TO the best interests # the
western underwater The insurance
of new cars is the better investment fer
the insurance company. local agents
claiming that % percent Of the hsses
are partial losses money paid Ouc Tor
damages sustained by old machines.
There is q serious need for adjust
ment OF rates and policies fc~ motor
car insurance in the middle west. aC-
cording TO local underwriters With
the exception of Chicago and envirous
there is little uniformity in the western
department extending from the Rocky
mountains to Ohio. In no other terri
tory is there such a diversion in rates
and policies. with the possible eiimina-
ton of the south. where the minimum
amount Of underwriting is done.
Conditions must be changed before
underwriting motor cars fairly com
pensates the company for the risk
taken saws A T Graham secretary
of the Western Automobile Underwrft-
ers' association. 1T is a popular but
erroneous belief that we are making
money out Of motor car insurance; that
the rates ave too high; that the pre-
NUNS paid by the motor car owner
are swelling the dividends Of insurance
concerns, but statistics show that the
margin Of profit is very small.
In the first place. the moral hazard
IS great II We could secure evidence
we would be able to send some to pris-
on for arson instead of paying them for
cars destroyed by fire It is net diff
cult. and sometimes very convenient to
have car burn up. A lighted match
applied to a gasoline tank on a lonely
country road makes it pOssib bic for one
who has insured his car against fire
TO realize on his Investment.
1t Is almost as easy to have a motor
car stolen Intentionally and just as diff
ncult for US to collect evidence in theft (
cases as in fire cases"
Lloyds, the pioneer in the motor car
Insurance field, already has found that /
underwriting barely equals the risk (
AIKEN Seven years ago the English !
company issued 4 very liberal policy
covering losses from fire and theft /
uon, collisions sustained. and third I
party danage-which appealed very !
strongly to the motor car owner. The 4
agents DID not discriminate between (
owned for pleasure and ma 4
rhlneS operated for hire, with the result /
that the company lost money on coils !
-ohS Tor which careless taxicab drivers [
ma professional chaUffeurs were in the |
majority OF instances responsible and /
Ultimately abandoned that class of bust (
ness american underwriters learned a !
4 j .
nand a much higher premium when in
surfing public vehicles
Few car owners understand why they
are required to pay a higher rate on an
lld car than on a new model The IN
lerWrlter is justified in his demands
however. it is claimed. The decreased J
value OF the car, IL written at the same
ATE as a new car, would yield proper
lonately less premium. while the com
)any liability would be for a greater
Css- The danger of partial loss on an
20 car IS as great, II not greater,
nan on new car. and as the amount 1
insured on an old car is less, the rate