Evening star., 1932-02-02
INSURANCE RATES
MEET OPPOSITION
Schedules for Auto Policies
in Is States Cause Motor
iStS' Objections.
BY ROLLTN NJ. CLARK.

Widespread opposition to the in
creased automobile liability insurance
lates recently announced for IS States
j being voiced in various parts OF the
country, following detailed study OF the
new schedules With additional pro-
tests coming in every day, the situation
is not encouraging to casualty under
writer's, who look upon the higher rates
rs a possible way of balancing losses
With income in this class of business in
the future rather than as means OF
TeCOuping past losses.
The fact is losses have been mount
ing with such rapidity that a radical
revision in rates was deemed essential
by the companies affiliated with the
National Bureau OF Casualty and Surety
I Underwriters, the national rate-maklng
body The average annual liability loss
per insured car has increased every
year In 1880 il was nearly 81 per cent
greater than in 1927. The new rates
are based on the experience of 1929 and
1880. with an additional per cent to
compensate for the higher loss expert
enCe Of the present day.
Merit Discount Discarded.
In addition to increases in the So
called manual rates. the merit rating
discount Of 10 per cent granted to in
suredS with clean accident records has
been discarded In its place was
planned a demerit system which would
have penalized operators with poor ac-
CldCnt experience, in varying degrees,
Ccpendent upon the number and Sc
verify of accidents in which they were
Involved Due to opposition from the
aency forces of the companies. how
t,cr. this feature OF the new rates has
lceu suspended Tor the time being.
lIny observers are OF the opinion that
will never be put into effect, because
Il practical difficulties in obtaining
necessary information for the classitica-
ton of risks.
Many of the protests against the new
T9JCS come from insurance agents.
one reason for this is that certain com
parieS not affiliated with the National
Pureau will continue to operate under
tho old rates. thereby gaining a dis
tlnCt competitive advantage Agents of
companies charging the higher rates
stand to lose a large volume of de-
enable business
Some State officials also are taking
cOgnizanCe of the situation. The Kan
SaS insurance commissioner has with
held approval until the 1881 experience
Is available Hearings may be held in
Wisconsin. while West Virginia, not af-
feCtcd by the present filing, but appar-
emily anticipating an increase in the
future. has Just ruled that data to sup
port any rate changes must be filed 80
GAYS before the new rates are to be-
CCme effective
II is understood some automobile
clubs stand ready To organize insurance
companies or associations to write la
hlllty insurance for members Several
clubs have already ventured into this
field At best. with sound underwriting
and wide spread Of risk. it has proved
difficult to make their operations prof
table,
Argument Against Rates.
One argument against the new rates
Is that they will result in an adverse
selection of risks and therefore. instead
Of solving the problem. will only ag-
gr2vate it This is on the theory that
careful drivers will be willing to take q
chance without such insurance. while
the carefree or reckless group will still
want protection so 2s to avoid the
financial consequences of the damage
they inf1iCt.
The national bureau contends that
It can prove the need for higher rates
Certainly the increased automobile ac-
Cident toll which in 1881 was 34.400
deaths and 9976OO personal injuries,
with al per cent Of the latter serious,
makes out a prima faCie case.
tCOpyTlEht, 1922