Insurance

Fire, a contract entered into between a company and a property owner. Insurance companies usually charge so much per $1,000 of insurance, and agree to make good any loss the owner may sustain from fire or lightning. Damages resulting from the use of water or from handling during the fire are also made good. In case of loss the owner is expected to notify the company's agents at once in order that an adjuster may be sent to agree with the owner as to the amount of damage. Rates are lower in towns where an efficient fire department is maintained. Most cities establish fire limits within which no wooden buildings may be erected. Property is usually rated according to the risk by joint inspection of the insurance companies. They make uniform charges based on this rating. The charge for three years is usually twice the charge for one year, the rate for five years three times the charge for one year, etc.

Fire insurance originated in London after the great fire of 1666. The first American company was organized in Philadelphia, 1752, with Benjamin Franklin as a director. At present over 600 American companies collect $300,000,000 each year, and pay losses running up to $150,000,000. The total risk of American fire insurance policies, speaking for 1909, was not far from $35,000,000,000. In case of great city fires, such as that in New York in 1835; Chicago, 1871; Boston, 1872; Baltimore, 1904; and San Francisco, 1906, a terrible strain is felt by the companies. To escape disaster a company avoids writing too large a share of its business in any one locality. In time of prosperity a surplus is laid by to meet an emergency call.

The following statistics exhibit the volume of business done by fire insurance companies in the United States during the year ending January 1, 1908: