Who Pays the Fire Bill?
Fire means destruction and waste always and often death and injury; yet the general public heeds it not. “Was the property insured?” is the public’s stereotyye question. This clearly implies the fallacy, that fire in insured property is not a waste, and that insurance companies pay for the loss.
Insurance is the basis of credit, and credit the basis of business so insurance is a business necessity; but it has led to public indifference concerning the alarming annual fire waste, and this because the public does not fully understand the insurance business.
Insurance companies are not alchemists making gold out of base metals, nor philanthropists paying losses out of private funds. Annually they collect from the people milions in insurance premiums. These moneys must pay for three things; the expenses of conducting the insurance business, dividends on the stock invested in the business, and all the fire losses.
These business expenses and dividends are fairly steady and take about one-half of the premium income, leaving fifty cents of every dollar collected from the people for settlement of adjusted fire losses. The people get back about one-half of what they pay out in premiums.
The size of the insurance rate or premiums depends on the amount of fire losses which must be paid, and a reduction in rates can come only as a result of a reduction of the fire waste.
Fire lays other burdens upon the public also. The ultimate consumer pays the insurance outlay of the dealers in raw materials, the manufacturer, the jobber, the wholesaler, and the retailer, when he buys any garment, food, piece of furniture, machine or anything else, so large fire losses mean high insurance rates and higher costs of everything.
Again, the public pays for the most expensive water works system and the best equipped and manned fire departments in the world. With enormous fire losses this protective arm cannot be neglected or weakened, but must be built up, improved and maintained at whatever cost to the public.
We will not put a money value on the 75 to 100 lives lost in fires each year, in Wisconsin, nor on the larger number of burns and injuries, but some one pays for these too.
The arsonist plies his contemptible trade, indifferent alike to loss of life and property, and the careless mortal will go on piling up fire losses, and the people complacently pay for the nefarious work of both. These two are responsible for more than 70 per cent, of the fire waste of the state.
Carefulness means fewer fires and this means lower premiums—Industrial Commission of Wisconsin.