The New York herald., 1921-07-27

quarters for a mercantile or manufactur-
ing enterprises in any large city, would
not only want information as to the
rental price but would want to know
what fire insurance rate / would have to
pay. While no guarantee against de-
struction by fire, of course, low pre-
MUM rate indicates that the construc-
tion is good and the danger from FIRE
minimized. There is nothing like mod
ern scientific rating by schedule to strip
81 the gingerbread and make building
transparent.
Schedule rating is your fire insurance
balance sheet of debts and credits. On
the debit side are the fire breeding and
fire spreading deficiencies; on the credit
side the fire resisting, fire preventing
and fire extinguishing factors. As these
matters are largely under the control Of
the owner, we call this a Sef-elective
rating system. 1t is rightly named.
Pause for moment and imagine the
thousands of ramifcations that must
enter into schedule rating. No two
buildings are alike; no two occupancies
alike; fire resistive and fire breeding con-
ditions are all different
Designed at first for mercantile and
manufacturing properties and other
large structures used for business pur-
poses, schedule rating has been extended
to apartment houses Of larger area,
though not yet generally to average
dwellings. 1t takes into consideration
varying features of each individual risk
and LOOKS 1hto to the conhagration pos
siblities and probabilities of the city in
which the property is located, including
width and grade of the streets, police and
FIRE department efficiency and other
factors that might have a bearing upon
'dama geabi1,,y" from fire.
There is nothing secret about the way
your rate Is iaade. 1t is set forth in this
balance sheet of debts and credits (all
printed out IN detail and expressed in
dollars and cents) and you or your au-
thorized agent or broker may have a
copy. In fact you should study this
balance sheet carefully if you would
know how your premium rate may be
still further lowered by improving the
fire rcsistive features of your property
Our schedules are not perfeet-no man
made system is-but we are sincerely
trying to perfect this Sef-elective plan
of rating for your sake as we'll as our
own. 1t is one of the anomalies of fire
insurance that we, as underwriters,
would rather insure low than high rated
risks. So we bend our energies toward
inducing you SO to perfect and safeguard
your property that low ate will be pro-
duced. Every time we can by this
method prevent fire loss-and every
fire in large city is the seed Of a con-
fagration-we reduce the cost to you,
furnish an example to others, conserve
the resources of the country and pos
sibly make some money ourselves. Yours
is the short but ours is the long road to
profit.
About the only classes of properties
today not generally rated by schedule
are average dwellings and risks of like
character. Logically all such properties
fall into certain groupings based upon
construction and take the same or a
fixed or fat rate. We term it "mini-
mum" rate. 1t is quite expensive to rate
dwellings by schedule, there not being
enough differentiation in the individual
risks, which are grouped by grades Of
construction called classes" to make
an apprecable difference, and the pre-
MUM rate is so low to start with that the
variation is likely to be only few cents
either way. The trend, however, is to-
ward the application of schedule rating
to even these few exceptional classes.
The machinery for schedule rating /,
enormous. Practically every fire loss in
fhA VIpsteI Ctotrc enstasosI hxr etNrE
companies is now classified as to cause,
construction of the building, occupancy
everything! 1t is hereulean Job.
We are learning to measure the damage
ability" of property of the many kinds
chow susceptible to fire and water dam
age it is); the hazards of exposure"
(your neighbor's property); what breeds
FIRE, spreads fire, and what puts out fire.
All this is reflected in basis rate which
may be termed our manufacturing cost
for better understanding. To this we
must add our home Office expenses; the
charges we have to pay for public super
vision, and fees and licenses, to the forty
eight states Of the Union; taxes (excep-
tionally high taxes they are too), and the
cost OF inspections. reinspcetions and
what not, all of which may be likened to
tHt JOODiHB VI nldHulaCtuTcQ ARTICLES,
though there is, OF course, much differ
enee. Our retailing process comes when
the finished product-the policy con-
tracts delivered to you at given rate
through local agents or brokers. In ad-
dition TO all this, Of course, comes the |
constant stream Of fire losses and their
adjustment and payment.
Every agent and every broker are
lending their influence to induce you to |
make the changes that will make your
property safer and thereby secure credits
in your premium rate; inducements that |
make the cost TO you lower. Every rat
ing organization in the country has an |
expert staff that is ever at your service
for this specific purpose.
II you know OF any other business
that u 10 ready and so willing, even so
snzious, to give you immediate conccs-
sion in price for doing your obvious duty
10 yourself, your community and your
Nation--well, would like TO know what
business IL is!
I JOHN B. MORTON
| President
NATIONAL BOARD OF
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