New-York tribune., 1917-12-02
Who Can Solve
This Problem in
Auto Insurance?
BY L. Z. II.

Here's a conundrum for all the auto
insurance men to solve.
II. bought car in August, 1915,
price $3.50. It was a nice. new car
and he got a nice, new policy, $3.50.
covering burglary and fire. The rate
was per cent, the premium
Twenty-Five dollars.
When August, 1915, came around the
company said it couldn't insure the
car for more than $1,000, which was
perfectly fair. II. was pleased that he
would be protected for all the car was
worth and would pay smaller pre-
MUM. Then he opened his bill and
the rate being now 2la per cent-the
premium was still
Twenty-Five dollars.
With the coming of August. 1871,
the company slid the value down TO
s625. which may or may not be fair,
and II. thought he surely would cut
down his premium. But no, the rate
had been slid up to per cent and he
had a bill for a premium OF the same
old
Twenty-Five dollars.
It is predicted that next year the
company will insure for only s4Oo, but
the rate will be per cent and the pre-
MUM will stick at its old post
Twenty-Five dollars.
II. wants 70 know whether, in 1920,
with the value down to $500, the rate
will be 1914 per cent and the premium
his old friend
Twenty-Five dollars.
He wants 70 know whether the COM
pany tagged his car with t25-a-year
tag the year he bought it. II so, why
The only argument he has been able
TO stir the company into IS that the
danger Of fire has increased. AS the
car is now kept in the same one-car
freproof garage as sheltered it in 1919,
II. is puzzled about this increased
hazard. The company talks about in
creased danger of back-fire and leaks,
but the fact is that II. keeps his car
in better order than in 1915 because
he knows more about 1t now.
The rate covering fire and theft has
doubled in two years, but the THEFT
part of the rate must really have di-
minished greatly. since the car Is shah
bier and less attractive to thief. Be-
sides. being an eight of rather un-
common make and equipped with a
good lock il never could have been
much of temptation to stealer OF
cars. Whether that had effect or not,
the risk of theft certainly must have
diminished with the aging Of the car.
a nd
theft were then 2 per cent and are
now 4 per cent, what has been the ad-
vance in fire rate alone!
II. estimates from figures given by
the company that his fire rate alone
has risen in two years from LIB per
cent to $50 per cent, or to almost three
times its original figure. And he Is
puzzled, the more so because he now
carries a fire extinguisher, Tor which,
in fairness, it may be said the insur-
ance company paid through It's 10 per
cent reduction in premium.
Now the insurance actuaries are in
vited 70 answer these questions:
Has X. been sentenced TO S25 year
FOR LIFE?
Or is a parole possible?
What has made his fire risk leap so
There are reports that increases 10
thefts in Western cities are likely 70
raise rates here. Aie they true?
Why does his car pay the same rate
as the more carelessly handled chauf-
feur-driven car kept in public garage
where there hangs a handsome sign,
mo Smoking?
Have these facts anything 10 do with
the circumstance that mutual auto in
surance companies are forming in this
gtatss