The New York herald., 1921-07-24

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
struetion by fire, of course, low pre-
MUM rate indicates that the construc-
ton is good and the danger from fire
minimzed. There is nothing like mod
ern scientific rating by schedule to strip
off 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 extinguishng factors. AS these
matters are largely under the control OF
the owner, we call this a Self-elective
rating system. 1t is rightly named.
Pause for a moment and imagine the
thousands of ramihcatons that must
enter into schedule rating. No two
buildings are alike; no two occupancies
alike; fire resstive 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 also to the confagration pos
sibilities and probabilities OF the city in
,b;-k h. &c iOrataI ,prtrd,p0
width and grade Of the streets, police and
factors that might have bearing upon
"damagcability" from fire.
There is nothing secret about the way
your rate is made. Ii is set forth in this
balance sheet Of debts and credits Gall
printed out in detail and expressed in
dollars and cents) and you or your au-
thorizcd 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 perfect-no man
made system is-but we are sincerely
trying to perfect this Sef-elective plan
of rating for your sake as well as our
own. II 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 rate will be pro-
duced. Every time we can by this
method prevent a fire loss-and every
e. 80, >,t,, ,e th> eneA ~
haeration-we reduce the cost to you,
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 risls of Ike
character. Logically all such properties
fall into certain groupings ba ea upon
construction and take the same or =
fixed or fat rate. We term it mini
mum" rate. II is quite expensive 70 rare
dwellings by schedule, there not oeing
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 is
enormous. Practically every fire loss in
the United States sustained by stock
companies is now classified as 70 cause,
construction OF the building 1ccupaacY
-everything! Ii is a hcr -u.ran Joo.
We are learning 10 measure the damage
ability" Of property OF the many kinos
(how susceptible TO FIRE and wstc- dam
age il isl; the hazards of "cyr
(your ncighbor'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 (exeep-
tionally high taxes they are tool, and the
cost Of inspections, reinspeetions and
what not, all OF which may be likened TO
the "iobbing" OF manufactured articles,
though there is, OF course, much differ
ence 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 10 all this, Of course, comes the
constant stream OF FIRE losses and their 7
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 las an
expert staff that is ever at your service
for this specific purpose.
II you know OF any other business
that Is so ready and so willing, even so
anxious. TO give you immediate conces-
sion in price for doing your obvious duty
to yourself, your community and your
Nation--wcll, would like TO know what
business it is!
JOHN B. MORTON
proe,l1rx