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be subject to altogether different risks of fire, yet what company, unless there were a glaring increase of risk, would charge more in one case than in another? The positions of buildings are in a few cases taken into account in rating just as much as is their construction or the trade which is carried on in them. For example, the whole of Belfast is subject to special rates on account of the defective fireextinguishing system and the Cripplegate area of London-the area in which are situated the London Manchester warehouses-is similarly penalised on account of the proved risks of conflagration. But generally speaking there is a lack of a uniform and carefully devised system in this country of distributing losses, and the fire insurance rating is taken in hand, like the national legislation, to meet admitted defects and not in order to work out a logical and comprehensive scheme. The tariffs do, as I have already mentioned, tend to improve risks by penalising faults and hazardous features but they fail to set up clearly a standard risk, that is, to set up a model for the best buildings, the best machinery and the best conditions for the particular business to which they apply. The standard risk can to some extent be inferred from them, but it is not explicitly defined and loses much of its direct effect.


I am referring of course to the United Kingdom for in the United States fire hazards are analysed and classified much more completely than has ever

been attempted in this country, and there is there a wonderful piece of analysis called the "Standard Universal Schedule for rating Mercantile Risks". This Universal Schedule has been subjected to much criticism and has not always been followed in practice for we have had fierce rate-cutting in the United States since it was drawn up, but it stands as by far the most scientific and complete exposition of the different nature of risks, not only as regards trades but as regards environment, which is to be seen in the world. As the British fire insurance companies do a large amount of American business, I may perhaps with advantage give here some brief account of the United States Universal Schedule. It will be dealt with more fully later on. This is not necessarily a schedule to be slavishly imitated in this country but a consideration of it will stimulate the imaginative outlook of fire insurance students. It may be regarded as a valuable basis of discussion. We must remember that the more exhaustive and accurate the classifications of fire risks become in other words the more perfectly the premiums paid by the insured are graded according to the risk actually run by them-the more the public will be convinced of the justice of the rates charged and the more nearly will fire losses be distributed equitably over the community, and this equitable distribution is the main purpose of fire insurance.

The American Universal Schedule sets up first a standard of environment, namely the CITY. A Stand

ard City is described as one with wide streets, gravitation water works, adequate fire department and pipe service, and a fire record of loss for the previous five years of not more than five dollars annually per 1,000 dollars of insurance. That is a loss rate of half per cent. per annum of insurance. (The average premium in the United States of America is more than 1 per cent. per annum as against about 4 shillings per cent. in the United Kingdom.)

Secondly, the schedule describes a Standard BUILDING which may be regarded as a model of ordinary construction.

The first step then is to set up a key or basis rate for a Standard Building in a Standard City—an arrangement which corresponds with the minimum or normal rate in a British tariff.

Then charges are made for variations from the standards of construction and also for deficiencies in any city or town where they are below the standard in respect of water works, fire departments, building laws, inaccessible or narrow streets, fire record in excess of the standard already mentioned and so on.

Additions are also made for deficiencies in the buildings where they are below the specification of the Standard Building in respect of thickness of walls, quality of material, character of roofs and floors, and floor openings, area, height, skylights, heating or lighting; all these things are taken into consideration according to their tendency to contribute to the destruction of a building by fire.

It will be seen how the two standards of a City and

of a Building contribute to the determination of a rate of premium. A Standard Building in a Standard City would pay the minimum rate. If there was a deficiency in respect of one or other the rate would increase directly in accordance with the deficiency, but if both city and building were below the standards then the rate would increase according to both deficiencies.

Having ascertained what a building should pay for its inherent or structural hazard and on account of its presence in a particular city or town the schedule then deals with the charges which are dependent upon the nature of its occupancy.

A list of stocks, trades and occupations is given, over 1,000 in number, and two columns are arranged. The first contains the figure which should be added to the building rate to measure the danger of the occupancy by reason of its tendency to cause fires or as affording fuel for combustion-in the schedule's language "ignibility" and "combustibility"-and the second column contains the charge for rating the contents themselves, being the figure which should be added to a building rate to determine the rate which its movable contents should pay because of their susceptibility to damage from water, smoke, heat and so on. This treatment of stocks in relation to buildings is the characteristic feature of the United States Schedule. The rates fixed for stocks are almost invariably in excess of those charged for buildings, sometimes twice as much, according to the susceptibility to damage or the combustibility of

the goods. The schedule says: "In direct ratio as a building approaches the Standard construction, and in direct ratio, also, as the city in which it is located approaches the Standard City as to water works, fire-extinguishing appliances, etc., will the difference between a building and the merchandise contained in it increase; in other words, the better the construction and fire department the better will be the building as a risk compared with the stock, and the poorer the construction and fire department the less should be the difference in rate between the building and the stock". As Mr. Moore, the Chairman of the Universal Schedule Committee which was appointed in 1891, says: "Clearly the same amount should not be added even for the same stock to two different buildings where one is an exceptionally good building and the other an exceptionally poor one; there should be a greater difference between the building and stock rate in the one case than in the other". Also he says it is clear that "if the risk is within the reach of hydrants, steam engines, etc., and on an eight-inch or larger water main it should rate differently from another of like kind, even in the same town, if the other risk is not so fortunately located". In the United Kingdom this fundamental distinction between the rates for stocks and for the buildings containing them has received little attention and in nearly all the tariffs the rates charged for buildings and for their contents are indentical. Among exceptions are Belfast warehouses, farming stock and Scottish shops. But the principle will, I think, be at

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