New-York tribune., 1922-06-11
Seeker of Fire
Policies Must
Prove Honesty
Past Experience and Moral
Standing To Be Examined
Before Insurance Will
Be Given 10 Merchants
Fight on Arson Started
Underwriters Claim Torch
Is Being Used to Tide
Firms Through Failure

The fre-rcsisting qualities Of a
{ building or the quantity OF auiomati ic
I fame-fchtine apparatus no longer Is
E 20 be the sole factor IN the issuance
I OF FIRE insurance policies.
From now on the "moral' risk IN
volvcd in the writing Of insurance "
20 be the determining element ms
means that an applicants financial
status and record will be serutinized
closely and his previous "hrc oXperi,,
ence" examined before he rs granted
q policy.
The new move is being made BY the
insurance companies. il was learned
last night. because Of the large IN
crease in the number Of fires Of a
suspicious origin IN this city. me
Fire Departments records show there
have been S.SS7 fires In New York IN
the last FIVE months.
This is an increase Of 1870 over
those for the same period Of the pre-
vious year. The New York Board Of
Fire Underwriters notes that the
losses for these five months arc 30
nor cent greater than last years.
The losses for the first FIVE months
Of this year. according TO the board s
$40 600 600 for structures that have
been insured by four companies, which
Is S4.OOO.OOO more than for the same
timo last wear. II was said that II the
6res I'm the buildings insured by fewer
than four companies were taken into
consideration the losses would amount
20 S2O.OO0.000.
The underwriters and city authorities
attribute the situation 90 unusual trade
depression.
at is probable that never before IN
the history OF fire insurance has the
moral hazard been so prominent as ~
the last twelve months says the re-
port Of the National Board Of Ere
Underwriters for May. Business has
been marked by innumcrable failures
and. as failures and fires are closely
allied. a large number Of plainly indi-
Gated business fires have resulted.
The underwriters issued warning,
urging greater care in the selection or
risks. A careful examination o. the
moral hazard" including the hnancia!
as well as the fire record Of applicants
for insurance. was recommended.
In submitting figures on the point
the underwriters cite tho unusual out
LrCak OF lItr lI tNf AiNNNtNh NA""'t A."
the cloak and suit areas the fires, they
said. increased li1 per cent IN 1920
over 1919 In The women's clothing
trade f-cs increased 229 per cent dur
ing similar period. The increase in
the mems clothing industry was 20 per
cent. while the paper box industry bad
a go per cent increase IN the number
Of fires.
Thomas !. brennan. Fire Commits
sioncr. is quoted as making the follow
ing observations with respect 20 the
situation:
We're inclined 10 attribute the in
crease 90 business c0rd tions. We have
augmented the force in the Fire Mar
shars ofhce and organized special
squads FOR certain districts Of the city
where trade ires are frequent. and we
think there is q little Improvement re-
Gently.
any opinion is that II There were
greater care used in issuing policies
there would be fewcr fires .r The husi-
ness districts. in certain trades, such
as millinery clothing. dolls. paper
boxes and furs. just as soon as prices
break they decide 90 sell thc.r stock
20 the insurance companies instead Of
20 the public"