Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1913-10-11
new STATE FIRE
INSURANCE LAW
WILL CUT RATES
Efficiency of Newark Fire De-
partment Factor in Saving
Money for Citizens.
BROKERS' CLAIMS ARE
SHOWN AS INACCURATE
Practical Result Proven by Fact
of Reductions and by Com
parison of Tables.


That New Jerseys new fire insur'
ance law, which went into effect Oeto
Der 4. and was heralded as a measure
which would bring relief from oppres-
sive rates. has brought about condi'
tions far worse than those it pretend
ed to avoid, is the statement of an
insurance broker of long experience
Ia this field.
He seemed very positive and wal
certainly very emphatic about the
matter. He had experienced soms
trouble with customers when renew
ing policies, the customers MAINTAIN
ing that rates had been reduced al
around, while the broker held tha'
they were mistaken. In reply &c
questions as to their authority the
customers told the broker they hao
s.,.ead II in the Evening Star" The
broker called at the Star office to sci
fine star right It is just possible thai
the Star will set the broker right
AT all events the matter is OF sucf
r,sS1nent to the thousands of people
who invest in fire insurance that
everybody should be set right Every
thing is given at its face value, Sc 81
that insurer and insured can argue IL
ont between themselves.
The evening star has undertaken a
pol1 of brokers and insurance men IN
general. seeking to learn the exact
facts It is the consensus of opinion
that the brokers' statement is not JUS
fifiad nv the conditions prevailing IN
Newark.
CoutpIafnt of Broker.
The broker first mentioned made the
following statement; g..
at have been asked many times TOT
reductions in the rate when renewing
policies. and invariably the request
has been based on the mistaken 1dea
that rates were, automatically lo"eIeu
by legislation at Trenton.
aIt is called to my attention that
the Newark Fire Insurance Exchange
has been done away with as an IN
lawful combination. This Is true only
in so far as the name is concerned;
The same body OF men which headed
that organization now styles 1tseh
bureau of experts and, while II no
longer issues rates IN the IoIIn VI d
fat il accomplishes the same purpose
a,The method now is for this bureau
90 1ss11egest rates." This always is
= dona with the statement that 1t IS not
incumbent upon the companies to fol-
low the sliggestion-but they always
do.
m help kill competition, rather than
10 foster it. Before the law was
passed there We're several colIp sriie9
- this field which did business indie
nanTently of the Newark Exchange,
ana who sold insurance at a lower
,-ate when the law was passed re
ouiring all companies to place on me
AZ Trenton. their complete schedules
these companies were forced TO JON
with the others in the matter OF rates
because the cost to a sAngle company
Of preparing these Schedules WIN
have been prohlpltlVe. i.
The fact that it takes away from the
hroKer-who is the agent OF the as
.ured and not of the company-the
~hanca TO Obtain for his client many
Al the privileges which were to be had
under the old ordsT of things,
"ITnder the new law several OIL lne
hnne-honored privileges IN hre ihsuT-
snce-notably the vacant house, sole
taos,,+, and mechanics privileges
are done away with or so altered as
70 make tSem of no further benehl.
Another side of the story.
rhasa statements were presented to
,,,ary of the leading insurance
brokers and underwriters of Newark
without a. dissenting voice they were
termed unjustitfed- =.
1,he new law itself was produced TO
show that each of the privileges
enumerated was granted; IN some
eases in more liberal form, Whlle Ill
others the restrictions were greater
"As a matter of fact, said one
1,,.oiser .sinsurance has been stand
ardized by the new law and no longer
is any broker or set of brokers
favored in the slightest degree. The
lay in full is not yet in effect, but
can saw positively that the rate has
been lowered in Newark.
ut will take SOME time to revise
all the rates to meet the changed con-
ditions, and as Newark IS the centre
Of insurance activity in the State the
local rates were whipped into shape
FIRST. The decrease is material"
In answer to the statement that
hureau of experts had uSurped the
place of the Newark Exchange this
same broker said;
s.I'he rates under the new law are
fixed by an expert in Newark, nut
his rulings are subject to the approval
of the State commissioner of banking
and insurance. and any protest made
against them will have the fullest IN
Vestieation. It is in the power of
The State to compel a rectification of
anv discrepancy between rates on
properties which have similar con-
ditions.
INSURANCE has been standardized.
AS a basis is taken an ideal house
under the rules of fire prevention.
Discrepancies from this model are
penalized in the rates. improvements
indicated by the underwriters and
made by the owners of the properties
remove this penalization.
1.-THE statement has been made that
the new insurance law was drafted
nv the head of an insurance com
pany. | do not believe this to be the
fact because it already is apparent
that under the new regime insurance
win cost less in the State than it did
before. No business man would cut
his own income willingly"
The law which went into effect this
month was presented by Senator
William e. Ramsay, of Perth Amboy,
and was passed at the last session of
the Legislature.
Fire Departments Efficiency.
AS far back as September 20 the
Evening Star published an article set
ting forth on the authority of docu-
ments, figures and approved orders
that insurance rates would be re-
tluced in Newark on and after Oc5
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