The Yale expositor., 1913-06-12
PALMER PLEADS FOR GREATER
PUBLICITY OF FIRE INsUR-
ANcE AFFAIRS.
ANNUAL LOSS TO THE STATE IS
APPALLING.
4 ls Thought Likely That the state
Will Be Compelled to Build New
Buildings For New De-
partments.
[By Gurd NJ. Hayes.l

In his annual report covering the
business of fire, inland navigation and
marine insurance companies, fled
with Gov. Ferris, Insurance Commits
Sioner G. A. Palmer makes a plea for
greater publicity in connection with
he fire insurance business. "All eff
forts on the part OF the insurance fra
.ernity along the lines OF the educa.
lion of the public, should receive the
hearty approval OF the state" says
Commissioner Palmer.
The average insurer depends 80
much upon the word OF the individual
agent for his insurance. and after the
insurance policy is issued, he feels
100 secure as 20 his property. Simply
because a man has fire Insurance
! policy he should not relax his vigilenca
! n the matter OF fire prevention, be-
.suse every step he takes to prevent
a fire, aids in the reduction of the
cost of insurance. During 1912 fire
absolutely destroyed $5,1l1,9SS worth
Of property in Michigan, which was
partially covered by insurance.
People will object seriously If there
s an increase in the tax rate, but
hey submit without objection If there
is An increase in levying of an annual
Toll, not only in this state, but in all
! the states of the union, which Is apall
ing in it's intensity, particularly be-
cause nine-tenths OF this toll could be
| done away with, IL a person would on
| ~ give the same care and attention 10
reducing the fire hazard that he gives
70 reducing the tax rate.
Attention has frequently been call
ID TO the necessity OF a thorough and
| frequent inspection of risks by insur-
Ince agents as large number of in
eendlary fires in this state and other
ltates are due to over insurance in
h5ed by fire insurance agents. Too
drastic a position cannot be taken
against this evil. While property may
be over insured in the beginning with
out any thought of crime, il circum-
stances develop which are financially
embarrassing to the person whose
property is over insured, temptation
Is placed in that persons way. which,
in q vast majority OF causes, is too
strong to be resisted. II an agent who
recommended additional insurance.
were compelled in case of loss TO con-
tribute to the company the amount OF
over insurance upon a risk placed by
him, in all probability he would be
more careful about recommending
additional insurance, where the app
licant was asking for all the insurance
that the property would stand.
Automobile insurance Is, at the
present time in its infancy, but be-
automobile business, it is clearly
apparent that some provision should
be made for the formation of an in
surance company that can insure the
owners OF automobiles against all
damages arising from any cause, re-
Esrdless OF whether 1t is property
damage or liability damage. The point
for serious consideration in this
connection Is the determination of
proper reserves that company trans
acting this class of business should
carry The reserves for losses due to
| fire, theft or collision, can be determin-
ed with approximate certainty, but the
question of reserves for liability losses
is as yet an unknown quantity. Hence
( in prescribing by law which shall con-
stitute the reserves of a company of
this character, sufficient latitude
sl.ould be given to departments to in
sure at least probable stability. With
this point in view, a bill was passed
lure, which will become law August
Is, authorizing the formation of auto
mobile insurance companies. The
Michigan law has been adopted as the
standard bill by the committee on laws
and legislation of the national conven-
tion of insurance commissioners.
"On January 1, 1912 there were %
FIRE and marine insurance companies
authorized to transact this class OF
business in Michigan, of which 13 com
panies failed to request a renewal of
their certificate of authority or with
draw during the year. Nearly all the
companies Withdrawing did so because
OF reinsurance or consolidation with
some other company. Thirteen COM
panies were admitted to transact busi-
ness, OF which three were mutuals.
Nine fire and marine companies have
been admitted so far this year.
During 1911, there was consider
able increase in the fire losses incurred
TO premiums received. This percent
age was reduced from 81 in 1911 to
.b3 In 1912. During 1911 the cost of
insurance for 500 was only 9S cents.
In 1912 II was raised to s1.0S per 800.
Az the close OF business, 1912, there
were four stock fire insurance com.
panies organized and operating in this
state, and one mutual operating on a
stock basis. The total admitted as