Detroit evening times. (Detroit, Mich) 1921-1958, 1942-06-17
A SPLENDID Example


A MOTHER splendid example of how government can
~ cooperate with free enterprise prosecuting the war
is furnished in the arrangement provide damage
insurance in the United States.
temporary plan was adopted by the government
shortly after the Pearl Harbor attack through in
surance corporation established by the Reconstruction
Finance Corporation which gave free insurance up to
s1OOOOOOO0 of losses resulting from damage to private
property from hostile attack.
1t was then obvious that comprehensive "cov-
erage" would be necessary
nut it also was obvious that were the government to
- expand its protection directly bureau
cracv would arise either with disrupting raids the
personnel of the private fire insurance industry, with
the supervision and details of the vast operation
mtted to inexperienced persons.
On the other hand it was recognized that the ut
mate risk" was heavy to be imposed upon the indus
try alone.
That industry which has been able to meet and to
survive such confagraons at the Chicago Baltimore and
San Francisco fires was not financially equipped to
sumo all at the most gigantic property insurance
program ever known.
Accordingly the government has created a billion
dollar war damage corporation to cooperate with the
industry.
beginning July !, war damage insurance will be
- obtanable by property owners in the same way as
ordinary fire insurance is obtained
The policies will be written and serviced by regular
insurance agents and brokers' and will be issued by their
respective companies at low premium rates.
The insurance companies will assume all losses COW
cred by the premiums paid in and will assume in addition
10 per cent of all exceeding net premiums up to
total of $2OOOOOOO
Additional losses will then be betrayed by the new
government corporation
The government, in effect, insures the insurance
itself instead of going into the insurance business directly
BY this means the highly developed fire insurance
industry which gives livelihood to numerous citizens
protected while putting its facilities at the service of the
public and government jointly.
Furthermore inasmuch the industry itself incurs
the risk of losses be paid of the indus
try is given the usual compensation in fixed percentages
amounts based upon policies for the work that it
performs
T THE same time, this national insurance venture
a will be administered by the nations insurance experts
and not by politicians political appointees
Government participation distributes final costs,
damage should be great enough the entire country
rather than assessing these costs heavily upon likely
to be most affected
This is both equitable and sound.
is equitable because damage insurance is part
of the national effort and the ultimate financial risk
should be laid accordingly.
is sound because if the private fire insurance indus
try to extraordinary risks and be bankrupted
by damages every region of the country would suffer
the consequences.
The government has acted wisely in utilizing the best
possible agency for public purpose while protecting that
agency against disaster to itself
The fire insurance companies have been patriotic in
accepting for themselves large share of the hazards
involved they could accept with due regard for their
normal obligations
Here's Mine, Where's Yovrs7