Law for Prevention of Fires in Wisconsin

Law for Prevention of Fires in Wisconsin

Commissioner Ekern, of Wisconsin, has issued a report on the new law enacted by the State legislature for the prevention of fire. He says:

“The compulsory requirement of periodical inspections throughout the State for fire prevention purposes is the first of the kind in the United States. In most cities the fire chiefs have eagerly taken advantage of this act to initiate and perfect plans for inspections which they already had in mind. The result is that cordial support is being given to the law by the fire departments.”

The report calls attention to the educational influence of these periodical inspections upon the property owner and the public, and states that this will bring about the general co-operation which is all that is necessary for more than halving our annual fire waste, besides inducing better construction and improved city planning. In addition to the information obtained by the inspectors, the new laws require a report of adjustment of loss and a report from the owner of each fire that occurs on his premises. Commenting further, he says;

“The plan does not call for the creation of any new office nor does it impose any burden in the way of additional expenditures either upon the State or upon the municipalities. It merely seeks to utilize the force now available and to secure the greatest results from the money now expended by the public. The fundamental principle is that it is more economical, as well as more sensible, to secure results by preventing fires as far as possible before they occur.”

The report further states that ordinarily no increase in the fire department force will be required, but where it may be necessary, no city or village can expend money to better nurposes. A brief table follows showing that a 50 per cent. saving in the fire loss for different cities in the State would range from $11,859 to $417,325 annually. Discussing fire insurance rates, the report directs attention to the increasing interest shown by the public in this respect, and states that the companies will be expected more and more to be able to justify the rates they charge, and the data now available for this purpose is neither complete nor satisfactory. It further states:

“The sooner it is recognized in insurance, the same as in other forms of business of a public nature, that the utmost openness and publicity based upon definite data are required, the better it will be for all concerned. These States or communities making intelligent efforts for the reduction of fire losses will necessarily inquire the extent to which these reductions are reflected in the insurance rates, and intelligent co-operation by the companies, preferably in some national way, will in the end be most economical and secure the best results.”

The Wisconsin committee’s recommendations are reviewed and attention is directed to other investigations now pending, and the previous legislation on the subject is analyzed. The statement is further made that:

“Reduction in losses sufficient to show that the same are not merely ordinary fluctuations in the loss ratio must inevitably be reflected in the rates charged for insurance. Sound business management on the part of companies demands that the rates should be reduced as such reductions are warranted by decreased losses. Unless promptly and fairly made, reductions will be enforced through competition of other agencies such as mutual companies, inter-insurers and Lloyds associations, or through direct supervision of legislation of the rate-making agencies, or of the rates themselves.”

During the past two years there have been admitted to Wisconsin 34 mutual fire insurance companies, eight inter-insurers and five Lloyds associations. The average rate for insurance for 1912 is $1.05 per $100, which is the lowest since 1879, and is six cents below that of 1911 and 63 cents below that of 1903 and 1893. The Wisconsin loss ratio during 1912 was 40 per cent., against over 50 per cent. throughout the country. For a five-year period it has been 47 per cent., against 52 per cent, throughout the country. Tables are also given showing the average rates and the loss ratio for the different classes of companies doing business in the State. The advantage of coinsurance is commented upon. Also the law to regulate the extension of credit for premiums and to provide for the licensing of adjusters, and to require the report of the schedules of commissions paid to agents.

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