The Waipawa Mail. Published Tuesdays, Thursdays, & Saturday. Saturday, May 27, 1899. INSURANCE COMPANIES AND FIRE BRIGADES.

Waipawa Mail, Volume XXI, Issue 3903, 27 May 1899, Page 2

The Waipawa Mail. Published Tuesdays, Thursdays, & Saturday. Saturday, May 27, 1899. INSURANCE COMPANIES AND FIRE BRIGADES.

That the benefit of an efficient and well equipped Fire Brigade to a community cannot be over estimated, is (says the Wanganni Chronicle ,) a proposition universally admitted. But a fire brigade like any other useful organisation, costs money to maiutain, and here it is, on this question as to who should bear the oost of maintenance, that conflict of opinion not infrequently arises. In this connection, and more especially at times when the community is startled by a serious conflagration, the fact that the insurance companies doing business in New Zealand do not contribute anything directly towards the support of tho fire brigades is the subject of a good deal of adverse comment. We use the word. “ directly ” advisedly, becanse the insurance companies themselves maintain that they do, indirectly, make a liberal contribution id respect to any factor which tends to minimise the fire risk. What the companies say is that it is not their business to put out fires, but to insure the risk and fix the premium in accordance with the existence, or non-exißt-ence, of adequate means for fire prevention in the shape of fire brigades, water supplies and fire extinguishing appliances. By this variation of premiums they claim that their clients derive the benefit, while on the other hand if heavier premiums were charged to cover contributions to brigades those who did not insure would get as muo’n benefit as those who did, and the latter would have to bear the whole additional

burden. According to a writer signing himself u An Expert,” in the current number of the New Zealand Journal of Insurance, Mining and Financo, “ the whole of the fire insurance companies established in New Zealand contribute by the manner in which they allocate their tariffs (rating on individual merits) upwards of £25,000 a year towards the cost of establishing and maintaining water supplies, fire brigades, and fire extinguishing appliances, etc.” This contention is supported by reference to the case of Wellington If there were no water supply, fire brigade, or fire extinguishing appliances there, Wellington would be rated under tariffs far higher than the existing ones, in order that the companies might be able to, partially at all events, recoup themselves the additional losses they would

under the altered ciroumstances be oalled upen to pay. Fire insurance companies do not ask that water supplies, fire brigades, and appliances for fire extinction be provided, but when they are provided that fact'is taken into account by the companies in the adjustment of their tariffs, and the property owners who bear the cost of the maintenance of these aids to fire prevention receive a compensating benefit in a low insurance tariff. On the other hand the writer in the Journal does not hesitate to mention what may possibly be oalled a selfish ground on which insurance companies object to contribute towards the cost of maintaining fire brigades, etc. By doing so, he says, they would be diminishing the amount of their own premium income, for the reason that immunity from fire losses of any extent, long continued in cities, will induce oitizens to reduce their insurance to a very largo extent, and he asserts to such an extent is the reducing process carried that the falling off in premium income of companies becomes very serious. The contention of the companies is, then, in effect, that it is immaterial whether there is or is not a fire brigade; if there is not then premiums go up; if there is their clients get the benefit of it by a reduotion of the premium rates. This theory, founded on the hard and fast business basis of risk and premium, is apparently sound, but in practice it is questionable whether it is not selfish, foolish and suio'dal. Now, we do not for a moment wish to belittle the advantages of fire insurance, as we regard the man who has property and does not insure it as a typical example of the “ penny wiso and pound foolish ” maxim. But might it not reasonably be asked why should the insurers and the insured benefit at the expense of those ratepayers who do not insure ? If we are to have a brigade it must be paid for. So long as it exists it is unquestionably a boon to the insurance companies, reducing’ their risks and enabling them, by correspondingly reducing their premiums, to increase their business. And yet their “ indirect contribution,” as it is called, would not so much as buy enough to grease the wheels of a single reel 1 If the principle on which the companies contribute to the brigades were generally applied, how would tho brigades exist ?