Illinois Staats-Zeitung -- October 16, 1867Premiums on Arson (Editorial)
The recommendation which the grand jury made to the recorder yesterday contained a severe criticism of the methods used by so-called fire insurance companies. If the statements of the grand jury are true, these corporations should really be called stock companies for the promotion of incendiarism. No stranger can spend more than a few days in this city without unwittingly applying the not very flattering, but true words, "confounded nest of incendiarists" to the metropolis of the West. And no resident of Chicago is so blind and so ignorant that he does not know that eight, or even nine, of ten fires are started intentionally. Unfortunately, it is seldom possible to prove this, since no crime can be concealed as easily as arson; but we are morally convinced that arson exists whenever the amount of insurance is more than double the amount of damage or the actual value of the property.2
The grand jury hit the nail on the head when it stated that the real cause of this evil, which is becoming more unbearable every day, lies in the fact that "insurance companies, in their greed for money, often insure property for as much as ten times its real value, a risk which is certainly not in agreement with sound business principles". The companies are actually levying high premiums on arson. The assumption that it is in their own interest to reject bad risks does not apply. Free competition becomes an inane, foolish, wild chase, a steeplechase, in which a few broken ribs or a broken neck do not count. Impertinent, "high-powered" agents talk the owners of tinderbox shacks into buying a thousand-dollar policy, although their dwelling, or rather their hut, is not worth, at the most, no more than three hundred dollars. Is it a wonder that many succumb to the temptation to do the company out of the money it is so anxious to get rid of?
The public is not only interested in removing this evil, it has also the right, yea the duty, to do so. And the greater the evil, the more radical and severe 3the remedy must be. If the insurance companies themselves do not take the necessary steps to prevent these "wholesale fires," then the legislature ought to take a hand in the matter and enact a law which provides:
1. That no house may be insured for more than three fourths its actual value.
2. That no policy is valid unless the County Board, co-operating with the assessor's office, has testified that the first provision has been complied with.
Perhaps a more thorough method would be to permit insurance not to exceed in amount the assessed value of the property. That procedure should be effective in reducing the number of fires by at least ninety per cent.
II E 3, I F 3, II E 2
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