The Hays free press. [volume] (Hays, Kan.) 1908-1924, 1921-09-22

panies carries no evidence whatever
of a compact, or trust, or combination
adverse to the interests of the policy
holders.
rating bureau would fix exactly /
the same rates that it does were only /
one company instead of a number to |
adopt its rates, and conversely it be-
comes a matter of easy computation
to determine how greatly the over
head expense of insurance would be
increased were each company to es-
tablish its own rate making depart
,ment.
The making or determining of an |
insurance rate turns on the three
items of fire loss, expense of opera |
ton and reasonable profit to the in
weston who makes the granting of in
demnity a possibility, thus tightening
| the burdens of all the people.
Fire loss arises out of the habits of
the people more largely than from
any other cause. This statement is of
easy demonstration. Let any one
glance at the causes of fire given daily
in the columns of the public press.
Carelessness on the part of smokers,
piles of rubbish and oily and greasy
rags lying around waiting for a fall
ing spark or lighted match or the
generation of spontaneous combus-
ton to start a disastrous fire. Fail
ure to turn off or to disconnect the
current from the pressing iron or
other electrical device or the careless
use. of gasoline in a closed room, fire.
quently near an open flame; rusted or
loOsely-hung stove pipes, wood boxes
too near the stove or the stove too
near wooden partition or improper
ly protected from the floor under
neath-these and numerous other
acts of careless disregard of the
danger of fire are not the work of in
surance companies but of the people
themselves, and for which the people
themselves are called upon to pay.
Nor should these things, which are
the prolific cause of insurance rates,
be charged against the rate maker or
insurance companies. The rate maker
merely discovers the facts and fixes
their cost in the premium. His one
great responsibility is to exactly
l measure the hazard and to make the
S rate commensurate with that hazard,
} thereby placing upon each class of
risks the burden of it's own environ
ment and fire loss. The rate maker
l acts independently of both the com
pany and the assured. His deduc-
tions are based entirely on the effort
to secure equity and prevent discrim-
nation.
The other two items, expense and
4 reasonable profits, entering as factors
j in the cost of insurance are too vel
e known to require extended comment
S That underwriting profit is neglible
= can be discovered easily by reference
o to reports on file in any state insur
o ance department.
;. That the expense of operation i!
) fixed by conditions, such as fedora
), and state taxes and fees, the high cos
). of every commodity and other fea
e aures passing beyond the control o:
the companies is an everyday fact o,
/ universal knowledge.
It The impelling truth that the PEG
n pie are to learn, and which ought t,
f control their mental attitude towart
} the companies in the matter of rat
% making, is that insurance rates ar
! not the result of arbitrary rulings o
: hop-skip-jump Methods with the on
= thought in view of securing excessive
= profits. The entire science of rat
= making turns on the effort to adjus
m rates to hazards and to make each ris
bear its just and proportionate shar
al of the fire hazard and total fire loss
l. which can only be determined wit