The Washington herald., 1921-08-27
MANY DISPOSED
TO INVESTIGATE
OWNERS OF CARS
Hesitate to Take Action
Until Conference
Adopts Rule.
TRY TO CUT LOSSES
Inspection Information Has
Disclosed Many Unfavor-
able Reports.

ttnueS 10 De Tue ShLSA SSN~
worry to the officers of many Of the
fire insurance companies. Most Of
them do not know what to do about
il. They might feel a little easier
il they had only the future business
Of their automobile departments to
consider, but that is only part of
the problem, and in many instances
the minor part What to do, II any
thing, with the business already in
force is often harder to decide.
Admiration has been expressed
for the good nerve OF the National
Liberty i'm announcin that its auto
mobile agents will be put on Is per
cent fiat commissions and Is per
cent contingent on September 1.
The wish was uttered that other
companies would do the same thing.
but it is doubtful if they will.
Restricts Theft Coyerase.
A large proportion of the COM
panies which feel the need of doing
something to improve the automo-
bile situation are prone to hesitate
unless a conference rule is adopted
and all companies are bound to take
the same course. Their faith in the
efficacy of rules is almost childlike.
Early this week the Eastern con-
ference adopted the restricted theft
coVerage for New York. New Jersey,
Hoboken, Newark and Philadelphia
\ good percentage of those who
voted for the rule wanted 1t eX-
tended throughout Eastern confer
ence territory. Some of them say
that it is as badly needed in the
Albany district, Buffalo and Pitts
burgh as in the cities for which
il was adopted There is some talk
Of individual companies undertake
ing to put in effect a similar rule Of
their own. but 1t remains to be
seen whether they will succeed.
One large office is now writing
only makes OF cars on which the
loss experience has not been alb
normally bad, and there is talk
among underwriters of cutting out
makes on which the losses are ex-
ceSsive. This would include several
of the most popular makes.
Neglected Care In Risks.
Long before the fire and theft
experience turned so bad there were
plenty of underwriters who stated
openly that most of the companies
were doing no underwriting worthy
Of the name, but were just accept
ing" business Now there are more
who are expressing these views and
some are admitting privately that
their own companies have been in
the Misunderstanding class. The
business has suffered from a repu-
tation OF being very profitable In
the past, and many companies
thought that il they only got
money on it wheth n care was taken
in the selection of risks or not.
They are now reaping the results
Of that policy.
Here and there is found a COM
pany which is not dong any serious
worrying These are mostly institu-
tons which have no: sought a large
volume. but have applied to the au-
tomobile business the same methods
they used in underwriting othef
classes. Realizing that the hazard
was in the owner rather than in
the car, they have Investigated the
owners through the Fire Record"
mercantile agencies and various re-
porting agencies, and have kept of
their books a considerable business
which is now presumably causing
sorrow to some of their competitors.
They are having more than a nor
NAL loss ratio, but they have not
to blame themselves for want of
care.
One noteworthy feature of the
Automobile situation is the fact that
II Is so much worse in large cities
than in the country and smaller
places. After making due allow
ance for the greater prevalence of
crime in large cities there is still
ground for the belief that the bet
ter experience in the smaller places
is due in part at least to the fact
that the agents who underwrite the
business know the assured, while in
the large cities the underwater as
a rule knows only the broker who
presents the risk.
A wide difference Of opinion ex-
tgts as to the value Of inspections
on assured. One official says that
his company has had excellent re-
suits from the Retail Credit Com
pany's Investigations. An officer of
another company says it has. Sc
cured most satisfactory results
through other agencies. Still an
other company uses the mercantile
agencies FIRST because their reports
cost less, and then the Retail Credit
Company later il necessary. That
the system OF getting reports on
owners of cars Is growing is evil
denced by the expansion of this
branch of the business of the Retail
Credit Company.
Many UnfayorabIe Reports.
sHice President Walter c. Hill of
that company. writes:
$Tt is only within the last few
rronths that ire insurance COM
pSntes have been making anything
ltke regular or systematic use of
Inspection information. During that
time We have opened with nearly a
hsndred fire companies accounts for
investigating automobile IRE risks
This includes practically all the big
Companies We have never handled
apy line of reporting in which there
is such a large per cent of unfav-
oreble reports One company had
" make a review Of all their auto
me- business in Kansas City and
found IL necessary to cancel II per
cent of the risks on their books
similar reviews have been made in
other communities with approx
iruately the same results"
= METAL MADKER