State fire insurance for public school property in Montana
by Harold Hampton Holen
A dissertation submitted to the Graduate Faculty in partial fulfillment of the requirements for the
degree of DOCTOR OF EDUCATION i n Education
Montana State University
© Copyright by Harold Hampton Holen (1970)
Abstract:
This study was a review of the policies and practices employed by the local school districts in Montana
in obtaining commercial fire insurance protection for buildings and their contents. After the data had
been received, an outline of a public insurance program was presented. Questionnaires were mailed to
two hundred seventeen schools throughout Montana early in 1970. One hundred fifty-six responses
were received, or about 71 per cent. These responses represent 80 per cent of the value of public school
property in Montana. A report was also received from the Montana Fire Rating Bureau. This report
showed earned insurance premiums from Montana schools for the period 1959 through 1968 to be
$3,094,616.00, and incurred losses to be $2,672,775.00, or 86.4 per cent for this period. For the same
period the schools reported losses of $2,548,910.39 and recoveries of $2,128,022.46, or a ratio of loss
recoveries of approximately 83.5 per cent.
One hundred thirteen schools reported using blanket policies, and 23 insured their property as
individual risks. The policy periods ran from one to five years. Fifty-nine schools reported using the
three-year term. Of the schools reporting, 123 spread the premium payments out into equal annual
payments.
There is a definite lack of uniformity in appraisal procedures. Appraisals were made by school
personnel, insurance agents, independent firms, or the County Assessor. Forty-three schools had
appraisals on an annual basis, while 42 had one every three years.
Eighty-four schools bought insurance exclusively with stock companies, while 23 dealt solely with
mutual companies. Eighty-three schools reported the agent was allowed to distribute the insurance at
his discretion. Fifty-eight schools reported they retained the same agent for an extended period of time,
since they were satisfied with his service. Ninety-six schools utilized co-insurance; all but four of these
used the 90 per cent coverage.
There is very little uniformity in the insurance programs of schools in this state. A statewide public
insurance program would be possible in Montana, since losses have averaged about $260,000 per year
over the past ten years and premiums are now about $1,000,000. STATE F I RE
INSURANCE FOR PUBLI C
SCHOOL PROPERTY
IN MONTANA
by
HAROLD HAMPTON HOLEN
A d i s s e r t a t i o n s u b mi t t e d to t he Graduat e F a c u l t y in p a r t i a l
f u l f i l l m e n t of the r e q u i r e me n t s f o r the degree
of
DOCTOR OF EDUCATI ON
in
E d u c a t i on
Approved:
Head ,
Maj cfr v e pa r t me n t
C o - c h a i r ma n / ,
Ex ami ni ng
Co mmi t t e e
Co - c h a i ^nf an,
Exami n i n g
Commi t t e e
MONTANA STATE UNI VERSI TY
Boz eman, Mont a na
, August,
1970
3 3 1 ?
H
n
Csf
%-
iii
ACKNOWLEDGMENT
The
author
wi shes
several
individuals
support
to
and
this
devoted
school
for
and
to
groups
project.
wife,
four
express
who gave
First
and
who s a c r i f i c e d
years
t o make
his
to
e n c o u r a g e me n t
foremost,
having
this
gratitude
to
a family
a
and
loving
and
taught
wo r k e c o n o m i c a l l y
feasible.
Next,
advisor,
freely
Also,
G.
and
of
to
Dean
Parsons,
School,
to
to
Dr .
their
P a l me r
from
of
Kappa,
support.
it
study
such
Larson,
provided
faculty
the
Dean o f
the
the
Mont a na
financial
relieved
of
some o f
many h e l p f u l
t he
is
bot h
Chapt er
mor al
of
of
Phi
and ec onomi c
particularly
difficulty
Henr y
assistance.
University
provided
Dr .
Dr .
Professional
i mm e a s u r a b l e
State
who gave
especially
of
maj or
suggestions.
Commerce and
College
support
the
Co-chairman,
member s,
School
whose members
as
Th i beau I t , who was
whom p r o v i d e d
to
The
since
and
other
Assistant
bot h
Robert
Ha r v e y
t i me
several
Also,
Delta
Dr .
appreciated
financing
a
this.
Lastly,
to
t he
state
In p a r t i c u l a r ,
appreciation
State
Auditor,
and
State
Fire
his
Marshall,
staff,
and
his
officials
is
due
and
E.
Mr .
who we r e
V.
" So n n y "
William
assistants.
A.
so h e l p f u l .
Omh o l t ,
Pentti la,
TABLE OF CONTENTS
Page
L I S T OF TABLES.
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vli
Chapter
I .
I NTRODUCT I O N . . . . . . . . . ......................................
STATEMENT OF THE PROBLEM.
Procedures.
Desi gn
2.,
of
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the
.
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St udy
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Limitations
of
the
Definitions
of
Ter ms.
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6
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10
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22
22
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I MPLI CATI ONS.
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I NSURANCE.
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I
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INSURANCE PROGRAMS.
TYPES OF COVERAGE
RATI NG
.
..................................... .....
GOVERNMENT REGULATI ON OF
ADMI NI STERI NG
.
.
Study.
INSURANCE
SOCI AL AND ECONOMIC
.
.
REVI EW OF RELATED LI TERATURE.
BACKGROUND OF
.
INSURANCE COMPANI ES.
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40
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42
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39
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44
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45
RATI NG OF PROPERTY.
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46
PROPERTY VALUATI ON.
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52
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54
SELF- I NSURANCE
IN SCHOOL SYSTEMS.
RELATED STUDI ES
3.
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. CURRENT STATE F I RE
SOUTH CAROLI NA. .
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INSURANCE PROGRAMS
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57
60
6I
Chapter
Pa ge
WI SCONSI N
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NORTH DAKOTA.
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ALABAMA
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64
66
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69
NORTH CAROL I NA. " ..........................
MI CHI GAN.
4.
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70
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. . . .
72
OTHER STATES.
73
MONTANA' S A T T E M P T ..........................
74
CURRENT SCHOOL
MONTANA FI RE
I NSURANCE PRACTI CES
RATI NG
BUREAU.
.
.
.
IN MONTANA .
77
.
79
.
.
.
.
.
SOCI AL U P H E A V A L ...............................................
80
BAS I C DATA.....................................................' ...................................
83
R A T E S ...................................................................................
85
INSURANCE RECOVERI ES
.....................................
88
....................................................................
90
KI NDS
OF POLI CI ES
REPORTED
COVERAGE..............................................................................
90
APPRAI SALS...............................................
91
TYPE OF C O M P A N Y ...............................
93
SELECTI ON OF AGENTS AND COMPANIES
RECORDS AND CO- I NSURANCE.
SCHOOL BOARD POLI CI ES
. . . . . .
„ ....................................
..........................................
93
.
. . .
A PLAN FOR MONTANA..........................................................................
BACKGROUND.
BASI C
..........................................................
. . . . .
REQUI REMENTS..................... .............................................. I OO
95
96
99
99
Chapter
Page
MANAGEMENT OF THE PROGRAM .
STARTI NG THE PROGRAM.
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.....................................................
FUNDI NG OF THE PROGRAM.......................................... .....
ACCOUNTI NG
I 03
FOR THE FUNDS...............................................
104
6.
. . . . . . .
VALUATI ON OF PROPERTY
. . . . .
PREMIUM PAYMENTS.
.
.
.
PROVI DED.
.
INITIATING
SUMMARY,
.
CONCLUSI ONS,
.
.
.
.....................
105
...........................
107
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108
MO
THE PROGRAM.
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AND RECOMMENDATIONS
.
.
Ml
.
S U MMAR Y .........................................................
CONCLUSI ONS
v
.
.
RECOMMENDATIONS
APPENDI XES:
Document s
A©
Questionnaire
B.
Co v e r
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
in
.- •
.
117
..................................................... .....
Used
.
.
Collecting
# .
.
.
.
.
.
.
.
.
I I4
M4
Dat a
.
.
I 19
. . . .
® ® .
•
121
•
L e t t e r ...............................
SELECTED REFERENCES
102
.
I NSURANCE COVERAGE.
FUNCTI ONS
101
122
129
.
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.
134
LI ST
OF TABLES
Table
Page
1.
Fire
Insurance
2.
Major
3.
U. S.
4.
Fires
5.
Deat hs
6.
Analysis
7.
F i r e Loss
Certain
Pr emi ums
Fires-Property
Fire
Los ses
8.
Sc h o o I
9.
Cost
of
of
Loss
Sc hool
Sc hool
.
.
.
.
.
.
.
31
1875-1967.
.
.
.
.
.
.
.
.
.
.
32
.
.
34
.....................
.
35
.
37
.
60
.
80
.....................................................
................................
Fires
1960-1966.
Ratios
Major
Fires
11.
Pr e mi u ms ,
12.
Range o f
13.
Three
1 4.
Reported
Fire
15.
Repor t ed
Recoveries
16.
Summary o f
and
Count i es
Losses
.
1959-1968.
.
.
.
82
1963-1968
.
.
.
.
82
Reported
.
.
.
84
. . . ' . .
.
85
. . . . . . .
.
86
.
.
19 6 9 * 7 0
19 6 9 * 7 0
by C o u n t i e s
by C o u n t i e s
Recoveries
.
.
.
Budget s
Pr emi ums
.
.
1962-1966.
i n Mont a na
Buildings,
Insurance
i n Mont ana
.
.
i n S e l e c t e d Syst ems o f
1921-1952. . . . . . . .
10.
Loss
29
.
Fires
Selected
« •
.
Sc hool
Ratios
States
.
.
Fires
650
Fi r e
Loss
19^5-1967
.
by Oc c u p a n c y .
in Major
Written
.
1960-69.
.
.
.
87
.
.
.
89
1960-69
.
97
1960-69
i n Mont ana
.
vi M
ABSTRACT
T h i s s t u d y was a r e v i e w o f t h e p o l i c i e s and p r a c ­
t i c e s e mp l o y e d by t h e l o c a l s c h o o l d i s t r i c t s i n Mont ana i n
o b t a i n i n g c ommer ci al f i r e i n s u r a n c e p r o t e c t i o n f o r b u i l d i n g s
and t h e i r c o n t e n t s .
A f t e r t h e d a t a had been r e c e i v e d , an
o u t l i n e o f a p u b l i c i n s u r a n c e p r o g r a m was p r e s e n t e d .
Ques­
t i o n n a i r e s we r e m a i l e d t o t wo h u n d r e d s e v e n t e e n s c h o o l s
t h r o u g h o u t Mont a na e a r l y i n 1 9 7 0 .
One h u n d r e d f i f t y - s i x
r e s p o n s e s we r e r e c e i v e d , o r a b o u t 71 p e r c e n t .
These r e ­
s ponses r e p r e s e n t 80 p e r c e n t o f t h e v a l u e o f p u b l i c s c h o o l
p r o p e r t y in Mont ana.
A r e p o r t was a l s o r e c e i v e d f r o m t h e
Mont a na F i r e R a t i n g B u r e a u .
T h i s r e p o r t showed e a r n e d
i n s u r a n c e pr emi ums f r o m Mo n t a n a s c h o o l s f o r t h e p e r i o d 1959
t h r o u g h 1968 t o be $ 3 , 0 9 4 , 6 1 6 . 0 0 , and i n c u r r e d . l o s s e s t o be
$ 2 , 6 7 2 , 7 7 5 . 0 0 , or 8 6 . 4 per cent f o r t h i s p e r i o d .
Fo r t h e
same p e r i o d t h e s c h o o l s r e p o r t e d l o s s e s o f $ 2 , 5 4 8 , 9 1 0 . 3 9
and r e c o v e r i e s o f $ 2 , 1 2 8 , 0 2 2 . 4 6 , o r a r a t i o o f l o s s r e c o v ­
e r i e s of a p p r o x i m a t e l y 8 3 . 5 per c e n t .
One h u n d r e d t h i r t e e n s c h o o l s r e p o r t e d u s i n g b l a n k e t
p o l i c i e s , and 23 i n s u r e d t h e i r p r o p e r t y as i n d i v i d u a l r i s k s .
The p o l i c y p e r i o d s r an f r o m one t o f i v e y e a r s .
Fifty-nine
school s r e p o r t e d usi ng t he t h r e e - y e a r t er m.
Of t h e s c h o o l s
r e p o r t i n g , 123 s p r e a d t h e pr emi um pa y me nt s o u t i n t o e qu a l
a n n u a l p a y me n t s .
There is a d e f i n i t e l ack of u n i f o r m i t y in a p p r a i s a l
procedures.
A p p r a i s a l s we r e made by s c h ool p e r s o n n e l , i n ­
s u r a n c e a g e n t s , i n d e p e n d e n t f i r m s , o r t h e Co u n t y A s s e s s o r .
F o r t y - t h r e e s c h o o l s had a p p r a i s a l s on an a n n u a l b a s i s ,
w h i l e 42 had one e v e r y t h r e e y e a r s .
E i g h t y - f o u r school s bought i n s u r a n c e e x c l u s i v e l y
w i t h s t o c k c o m p a n i e s , w h i l e 23 d e a l t s o l e l y w i t h mut ua l
c ompa ni e s.
E i g h t y - t h r e e s c h o o l s r e p o r t e d t h e a g e n t was
a l l owed to d i s t r i b u t e the i nsur ance at his d i s c r e t i o n .
F i f t y - e i g h t s c h o o l s r e p o r t e d t h e y r e t a i n e d t h e same a g e n t
f o r an e x t e n d e d p e r i o d o f t i m e , s i n c e t h e y w e r e s a t i s f i e d
w i t h his s e r v i c e .
N i n e t y - s i x s c h o o l s u t i l i z e d coi n s u r a n c e ; a l l b ut f o u r o f t h e s e used t h e 90 p e r c e n t
coverage.
There is ver y l i t t l e u n i f o r m i t y in t he i nsur ance
p r o g r a ms o f s c h o o l s i n t h i s s t a t e .
A statewide public
i n s u r a n c e p r o g r a m wo u l d be p o s s i b l e i n M o n t a n a , s i n c e
l o s s e s hav e a v e r a g e d a b o u t $ 2 6 0 , 0 0 0 p e r y e a r o v e r t h e
p a s t t e n y e a r s and p r e m i u m s . a r e now a b o u t $ 1 , 0 0 0 , 0 0 0 .
CHAPTER
I
I NTRO DU CT I ON
Providing
is
an e x p e n s i v e
pays
handsome
ment
to
for
the
receive
it
the
expended
state
of
for
from
ity.
taking
to
nation.
social
for
Mont ana
available
matter,
of
eac h
that
develop­
f unds
that
taxpayers
value
of
a function
the
for
be a c c o m p l i s h e d
present
s y s t e m and
devel opment
must
young
the
the
is
and
Si nce
activity
that
correct
future
activity
it
youth
this
are
state
dollar
education.
to
people
in
A f e w e x a mp l e s
United
and
and
help
people
to
in
farsighted,
demand
is
make a
t he
wi se
basis.
continuous
to
if
This
t he
kind
be f o r t h ­
s y s t e m.
States
forceful,
will
the
on a s t a t e w i d e
educational
the
be a g r o w i n g ,
need
if
inadequacies
pursue
be t h o r o u g h
state's
Education
tinues
other
can o n l y
effort
t he
Ho we v e r ,
maxi mum e d u c a t i o n a l
education
comi ng
any
imperative
for
i n e c o n o mi c
the
educational
planning
bot h
and
on p u b l i c
concerted
type; o f
or
is
This
state's
undertaking.
returns
education,
limited,
a good e d u c a t i o n
has
been
changing,
illustrate
and
d y n a mi c
wh a t
con­
activ­
has
been
place.
In a b s o l u t e
stegdiIy ,
and
this
numbe r s,
gr owt h
is
enrollment
expected
to
has
been
continue
g r o wi n g
into
t he
2
foreseeable
future.'
The
country
increased
rapidly
has
new e mp h a s i s
out
the
tion.
on v o c a t i o n a l
land,
The
providing
much o f
national
Def ense
has
to
Court
into
decision
the
expect
these
in
The
public
years
million
quality
Sc hool
c ommi t me nt
^Geor ge I .
M a n a g e me n t ,
2Ibid.,
the
property
per
p.
has
year.3
to
for
recent
i mp e t u s
has
of
the
the
at
by f e d e r a l
its
have
" new m a t h . "
to
by
since
the
Supr eme
introduced
Most
continue
a
integration
the
been
is
through­
concern
Racial
since
this
legisla­
especially
1958.
in
There
education
shown
before,
colleges
years.^
technical
innovations
Mont a na
education
(Helena:
the
people
investment
junior
some d e g r e e
in
of
of
New me t hods
such as
of
Ac t
frequency
dollars
stantial
ever
to
1954.
kinds
school
this
than
schools
of
and
given
Education
schools,
increase
in
the
it
in
g o v e r n me n t
mor e money
National
come
number
educators
and
to
future.
had
the
been
invested
end o f
1966.
increasing
This
amount
educational
state's
young
$256,150,521.00
Duri ng
by a l m o s t
represents
endeavors
people.
ten
a sub­
to
The
C o l l i n s , " So Get At T h a t B a c k l o g
X I ( Nov e mb e r , 1 9 6 7 ) , P . 5 9 .
recent
provide
l oss
Now, "
58.
^Harriet M i l l e r , Biennial
S u p e r i n t e n d e n t of P u b l i c
Report, S t a t e of Montana,
I n s t r u c t i o n , 1 9 6 8 ) , pi 3 9 .
3
of
any
part
difficulty
it
is
this
for
the
necessary
carrying
may
of
c o mme r c i a l
to
school
of
system
protect
At
this
the
property
the
1964-66
Mo n t a n a
spent
education.
The
insurance
protection
varies
averages
b e t we e n
one-half
per
cent
From t h e
of
tents
that
in
the
risk.^
create
financial
involved.
property
present
Therefore,
against
time,
l os s
school
by
trustees
by p u r c h a s i n g
coverage
bi enni um,
public
fire
the
type
Also,
the
United
of
from d i s t r i c t
property
there
of
f r om
school
is
appears
to
for
district
fire
district,
cent
but
t o one and
budget.
it
appears
buildings
high,
covered
s c hool
school
to
one p e r
literature,
States
of
expenditure
operating
available
insurance
of
total
three-fourths
of
the
$200,799,648.00
for
cost
wo u l d
underwriters.^
Duri ng
f unds
school
insurance.
insure
s y s t e ms
i nvestment
and
considering
should
that
their
the
the
con­
fact
be a p r e f e r r e d
be a d i s p r o p o r t i o n a t e
ratio
flC h o a t e and W e r t z , R e v i s e d Codes o f Mo n t a n a 1947
A n n o t a t e d , ( I n d i a n a p o l i s : The A l l e n Smi t h P u b l i s h i n g C o . ,
1 9 6 2 ) , p. 7 5 .
'’ Pa ul B. S a l mo n , F i r e I n s u r a n c e P r i n c i p l e s and
P r a c t i c e s i n Sc hool D i s t r i c t s E mp l o y i n g N a t i o n a l l y A f f i l i a ­
t e d B u s i n e s s O f f i c i a l s , B u l l e t i n No. f 8~ ( Evans t o n : As s o c i a t i o n o f Sc hool B u s i n e s s O f f i c i a l s o f t h e U n i t e d S t a t e s
and C a n a d a , 1 9 5 8 ) , p. 3 6 .
4
b e t we e n
as
the
pay me nt
returned
amount
for
as
of
fire
pa y me nt
At
for
fire
losses
out
for
paid
sider
average
on a l l
the
types
collected,
insurance
s y s t e ms
to
of
so h i g h .
must
replace
carry
their
There
the
cost
of
Montana.
fire
several
property.
insurance
amount
of
This
insurance
considerable
staff,
t i me
be
mi ght
of
it
per
to
most
could
to
not
the
This
part
be w a r r a n t e d
by
fire
afford
by f i r e .
to
s y s t e ms
re-value
in a r e d u c t i o n
needed.
wo u l d
of
-
s c hool
attempt
school
attempt
result
school
destroyed
public
compa ni e s
pr emi um d o l l a r
of
to
per
When we c o n ­
cost,
they
t h e money
cents
insurance
cost
the
we r e
and e x p e n s e on
not
the
since
for
coverage
and m i g h t
fire
returned
level
31.81
p o s s i b l e ways
One met hod wo u l d
school
busy
if
was
cents
why
insurance,
money
national
all
In s p i t e
t he
insurance.^
57.2
wo n d e r s
property
are
for
was
and
the
fire
loss
property
the w r i t e r
is
paid
losses.
pr emi um d o l l a r
that
pr emi ums
reduce
in
all
in
t he
require
an a l r e a d y
the
savings
r e a I i zed.
Another
c o mp a n i e s
and
insurance
rates
procedure
the
6 Ibid.,
rating
lowered.
p.
39.
wo u l d
bureaus
If
all
be
to approach
the
insurance
i n an a t t e m p t
to
the
individuals
concerned
have
the
5
and o r g a n i z a t i o n s
A third
adopted
does
approach
a policy
n ot
cooperated,
of
insurance
i n Mo n t a n a woul d
a sufficient
reserve
considerations
The
to
initiate
insurance
is
usually
objects
town,
from
the
those
insured
is
too
so t h e y
the
t i me
voters,
school's
are
of
to
with
the
the
since
a wi de
geographical
be
large
the
enough
in
aside
that
legal
difficult.
the
s c hool
for
Self-
s ma l l
since
the
number o f
one o r
t wo
school s
passage
could
setting
self-insurance.
scattered.
through
s c h ool
rather
be f o r
school s
practice
probable
impractical
f e w - - us u aI Iy
most
Also,
of
cause
promising
the
a bond
per
t i me
issue
h a v oc w i t h
appr oach woul d
pr ogr am.
as a ba s e wo u l d
insured
to
of
this
and most
is
wo u l d
the
l ag
by
t he
p r o g r a m.
state
sound,
fact,
approach
a self-insurance
entire
it
in Mont ana,
widely
loss,
educational
to adopt
this
reconstruction
Per haps
state
not
In
Also,
considered
as
i n wh i c h
all,
a practice
such
be p o s s i b l e .
difficulty
possibility
districts
districts,
be one
at
have
fund.
woul d, make
fourth
wo u l d
mi g h t
non i n s u r a n c e .
constitute
s y s t e ms
this
area,
allow
property
and
the
accurate
be f o r
the
Self-insurance
be t h e o r e t i c a l l y
wo u l d
be s c a t t e r e d
number o f
objects
statistical
over
woul d
determination
6
of
the
probable
cl ai med
to
the
of
fire
for
l oss
this
school
from f i r e . ^
plan
is
s y s t e ms
insurance
that
The m a j o r
it
should
by a s u b s t a n t i a l
advantage
result
in a savi ngs
reduction
in
t he
cost
coverage. ^
STATEMENT OF THE PROBLEM
At
state
the
fire
A l a b a ma ,
insurance
North
Wisconsin,
the y e a r
surance
1900.
costs
in
$50,000.
the
of
Ho we v e r ,
such
plan
is
in
plans
states
to
the
l oss
a s ma l l
are
five
effect.
Carolina,
hav e
cent
also
in
Carolina,
effect
savings
of
reserve
limited
reserve
ineffective,
So ut h
and
with
states
c o mme r c i a l
is
fire
only
a
are
and
since
on f i r e
has a s t a t e
total
is
states
These
been
report
50 p e r
Michigan
on any one
Wi t h
Michigan
these
five
of
there
North
f r o m 20
state
force.
and pa y me nt
All
t i me
program
Dakota,
Some o f
The
plan
present
in­
rates.^
insurance
$250,000
t o a maxi mum o f
limited
and c a n n o t
payments,
be c o n s i d e r e d
^K. 0 . N y g a a r d , S t a t e F i r e and T o r n a d o F u n d , ( Bi s ma r k : N o r t h Da k o t a Pr o d u c t s , I 9 ^ 7 ) , P . 7.
O
S t a t e i n s u r a n c e F u n d , F o r t y - S e c o n d An n u a l R e p o r t ,
( M o n t g o m e r y , Al a b a ma : D e p a r t m e n t o f F i n a n c e , 1 9 6 6 ) , p . 12.
^ Ge o r g e R . R o b i n s o n , " S t a t e I n s u r a n c e o f P u b l i c
Sc hool P r o p e r t y i n M i c h i g a n " ( u n p u b l i s h e d D o c t o r ' s d i s s e r ­
t a t i o n , Wayne U n i v e r s i t y , D e t r o i t , 1 9 5 6 ) , p. 2 5 .
7
a true
state
insurance
Several
reduced
their
concepts.
if
cities
ha v e
principles
used
Philadelphia.
this
conducted
the
three
the
All
respective
states
states
three
the
fire
insurance
10Ib id .,
p.
of
could
l ower
plan
a state
this
save
insurance
as opposed
61.
study
of
suc­
school
and
dis­
s e l f - i n s u r a n c e . ^^
revealed
similar
to
that
this
Michigan,
one
and West
that
t he
I9
insurance
plan.
is
The s c h o o l
that:
a substantial
p r e mi u ms ,
to
or
r ecommended
fire
large
Rochester,
no c i t i e s
literature
hav e
a
following
Seattle,
Tennessee,
for
degrees
utilize
studies
studies
adopt
of.Montana
form of
of
are
to
related
other
The h y p o t h e s i s
in
enough
The
varying
have
self-insurance
profitably
followed.
there
Virginia.
s y s t e ms
are
Obviously,
been
In
function
system w i t h
large
States
by e m p l o y i n g
Baltimore,
A review of
ha v e
t h& U n i t e d
Cleveland,
i n Mont a na
there
in
costs
met hod w i l l
sound
Chicago,
tricts
cities
insurance
This
system
cess:
large
p l a n . ^®
amount
by h a v i n g
c o mme r c i a l
01I b i d . ,
1
of
money,
a state
coverage.
p.
25.
1^ l b i d . ; s ee a l s o Ra l p h B. F i n c h u m, "A St u d y o f t h e
I n s u r a n c e P r a c t i c e s and P r o c e d u r e s o f T e n n e s s e e P u b l i c
Sc hool B o a r d s " ( u n p u b l i s h e d D o c t o r ' s d i s s e r t a t i o n , U n i v e r ­
s i t y o f T e n n e s s e e , 1 9 5 3 ) ; and H a r r y J . H a d l e y , "A St udy t o
D e v e l o p , A n a l y z e , and E v a l u a t e a S t a t e F i r e I n s u r a n c e P l a n
f o r P u b l i c Sc hool Syst e ms i n West V i r g i n i a " ( u n p u b l i s h e d
D o c t o r ' s d i s s e r t a t i o n . West V i r g i n i a U n i v e r s i t y , 1 9 6 8 ) .
8
Procedures
The
this
following
procedures
we r e
used
in
conducting
study:
A.
A review
B.
Survey
ing:
of
of
school
fire
types
procedures,
amount
to
verify
responses,
Obtain
from
property,
to
regard­
recovery
used,
insurance
information
school
appraisal
carried,
relative
State
data
and
to
their
of
i n Mont ana
accounting
with
school
current
schools,
and
s y s t e ms
to
and
officials.
Superintendent
such as
number
s y s t e ms
e x a mi n e
confer
the
Instruction
l oss
carriers
of
selected
and
i n Mont a na
pr ogr ams.
Travel
records,
s y s t e ms
of
significant
insurance
literature.
insurance,
experience,
fire
D.
available
all
Cos t
other
C.
of
of
Public
valuation
of
present
enrollments.
E.
F.
Confer
with
office
for
assistance
Re v i e w
the
plans
now u s i n g
G.
the
State
a plan
appears
to
and
for
fire
in o t h e r
insurance
Mont a na
be e c o n o m i c a l l y
Commi ssi oner ' s
suggestions.
in o p e r a t i o n
a state
Pr opose
Insurance
if
states
plan.
such
a plan
feasible.
9
Desi gn
of
the
St u d y
The f i r s t
available
and
insurance.
finance
It
also
giving
naire
reports,
and West
the
was
fire
to
school
periodicals,
unpublished
insurance
material.
and d u t i e s
studies
Virginia
to
using
school
this
texts,
of
fire
s c hool
studies,
The
Tennessee
Dr .
associa­
Codes o f
school
trustees
and West
to
1.
2.
collect
J.
of
T o t a l v a l ue of
C u r r e n t budget
13 I b i d
in
in Mi chi gan,
revi ewed
for
was
the
used
purpose
during
school
Ra l p h
studies
following
to obtain
The q u e s t i o n ­
by D r .
respectively.
the
used
in Mont ana.
ones
Hadl ey
in
appears
study.
Virginia,
data
now i n o p e r a t i o n
each
conducted
wer e
districts
Harry
plans
a questionnaire
a modification
Fi nc hum and
insurance
and a summary o f
three
direction
from
designed
studies,
insurance
state
The
A survey
data
related
reviewing
related
in d e t a i l ,
ill.
Tennessee,
of
six
studied
Chapter
state
to
s t u d y was a r e v i e w o f
exami ned.
The
wer e
of
f or ma l
and o t h e r
relating
the
literature
consisted
reports,
reports,
Mont a na
wer e
pertinent
textbooks,
insurance
tion
p ha s e o f
13
conducted
it
twenty
buildings
B.
and
was
areas:
contents
in
IO
3.
4.
5.
6.
7.
P o r t i o n of budget a l l o c a t e d t o f i r e i nsur anc e
Number o f b u i l d i n g s i n use
Cur r ent r a t e paid f o r f i r e insurance
How t h e r a t e was d e t e r m i n e d
Number o f b u i l d i n g s i n s u r e d s e p a r a t e l y and
number c o v e r e d by b l a n k e t p o l i c y
T o t a l amount o f c o v e r a g e
Type o f e x t e n d e d c o v e r a g e
Policy periods
Los s e s by t y p e s and y e a r s
Pr emi um r e c o v e r i e s
Me t h ods o f p l a c i n g i n s u r a n c e
I nvent or y procedures
Ty pe o f company
Me t h od o f p a y i n g pr emi ums
D i s t r i b u t i o n of i nsurance business
P e r i o d i c checks o f e x i s t i n g p o l i c i e s
Extent of coinsurance
Loss e x p e r i e n c e w i t h i n s u r a n c e r e c o v e r i e s
8„
9.
1 0.
11.
1 2.
1 3.
14.
15.
1 6.
1 7.
18.
19.
20.
The q u e s t i o n n a i r e
all
fifty-six
f r o m 53
counties
educational
responses
value
of
or
p r o g r a ms
all
the
of
this
it
appears
feasible
study.
is
Limitations
Many
is
Montana.
of
the
types
to
cent
of
the
reporting
facilities
included
comment s
A state
detail
s y s t e ms
wer e
total.
counties,
Due t o
cent
in
state.
made by Sal mon
plan
fire
in
mi ght
insurance
the
the
80 p e r
the
in
received
of
t he
A copy
in Appendi x A a t
insurance
in
school
Replies
approximately
fire
discussed
per
the
From t h e
a state
for
in
educational
questionnaire
sent
in Montana.
94.6
represented
of
Mo n t a n a
counties
was
page
and
12 2 .
Hadl ey
be e c o n o m i c a l l y
plan
Chapter
Five.
cover
al most
for
St udy
of
insurance
to
any
type
of
risk
are
available
such
coverage.
woul d
support.
This
school
standard,
Also,
and
to
study
one and
type
of
The
accurate
For
wer e
according
Studies
field
of
the
of
deal
types
of
t i me
to
provided
coverage
value
willing
all
be c o n f i n e d
to
and
be
fire
to
their
usually
states
n ot
for
of
insurance
and
financial
insurance
of
f or m,
policies.
contents
pr e mi ums
insignificant
in o t h e r
pay
by b r o a d
insurance
involved,
of
insurance
of
this
risk
group
^Hadley,
is
we r e
paid,
in
relation
indicated
that
insured.^
the
op.
that
subject
cit . ,
p.
technical
t e r ms
an e c o n o mi c
under
the
requires
terms.
are
defined
usage.
is
by c o m b i n i n g
used
following
accepted
Insurance
is
one wh i c h
frequently
study,
o b j e c t s ' so s i t u a t e d
t o whi ch
are
Te rms
I ri su r a n e e .
of
was
to g e n e r a l l y
reduces
great
assumed
definition
purposes
that
total
property
Def i n i t Ton o f
study
room s t r u c t u r e s
the
totals.
that
i n Mont a na
extended
t wo
since
state
will
s y s t e ms
recoveries
this
require.a
and/or
excluded
schools
A compl et e
available
public
to
one management
aggregate
becomes
16.
institution
accidental
predictable
a group
losses
within
12
narrow
limits.
be s a i d
to
include,
insurer,
for
sured
to
or
Insurance
accidental
is
certain
legal
consideration,,
render
losses
effected
contracts
pr omi ses
services
suffered
usually
in
case
to
of
by,
and
can
u n d e r wh i c h
r ei mbur se
certain
during
the
term o f
losses
are
those
the
the
in­
described
the
a g r e e m e n t . ^**
Fire
insurable
writers
losses.
through
of
fire
a
The
or
RjTsJt.
exists
as
to
Pu r e
certainty
occur;
provided
by c o mme r c i a l
whi ch
are
under­
term p e r i l
refers
to
a contingency
wh i c h
loss.
Hazard.
introduces
coverages
losses
insurance.
Peri I .
may c a u s e
Fire
as
a pure
Hazar d
is
increases
Ri sk
the
is
the
Pur e
to whether
risk
as
that
probability
defined
occurence
risk.
defined
of
risk
the
can o n l y
^ C l i f f o r d H. A l l e n ,
I n s u r a n c e P r o g r a m , " A me r i c p n
( J u n e , 1 9 6 5 ) , p. 5 6 .
as
the
of
condition
l oss
wh i c h
from a p e r i l .
uncertainty
that
some e v e n t .
occurs
when
destruction
produce
of
loss,
there
is
an un­
an o b j e c t
should
will
t he
"How t o Manage a Sc hool
Sc hool and U n i v e r s i t y , X
peril
13
occur.
An e x a mp l e
l oss
one's
of
risk,
whi ch
as
can
those
stances,
other
are
considered
individual
transferor
the
same
desires
to
the
the
position
t o assume
risk
Excluded
to
those
insurance
risk.
uncertainty
or
their
loss.
liable
to
The
as
it
may be
risks
unique
to
was
therefore
rates.
of
to
de­
t han
the
risk
assume a r i s k
risk
is
circum­
loss
and a r e
Insurance
another
of
to a s p e c u l a t i v e
Transferring
escape.
the
to
situations
the
bearer
profit
less
reduced
to
the
term p r e f e r r e d
in
pays
l oss
the
in a b e t t e r
occurs
that
is
the
often
transferor;
financial
risk.
perils,
i t e ms
that
property,
are
not
and
losses.
covered
These
t e r ms
by a s t a n d a r d
fire
policy.
Insurance
company
be
be
as opposed
due
t r a n s f e r ree
H o we v e r ,
refer
to
insurable
Transferring
when one
The
which,
reflected
wo u l d
in e i t h e r
risks.
risks
risk
by f i r e
result
compar abl e
ordinarily
pure
property
Preferred
fined
of
agent.
in a r r a n g i ng
Insurance
negotiating
an
An a g e n t
a contract
broker.
insurance
acts
for
A broker
contract
for
the
insurance
insurance.
acts
with
for
the
the
insured
underwriter.
in
H
Ftre
to
the
the
per
loss
cent
school
ratio.
of
system
endor sement s
of
the
for
the
Re pl a cement
current
cost
of
property
term f i r e
pr emi um d o l l a r
damages
by f i r e
Insurance
policy.
value.
replacing
Sound v a l u e .
sured
The
or
The
comput ed
This
that
from
ratio
is
term
is
value
to
defined
the
is
refers
returned
according
restoring
sound
l oss
t he
as
damaged
cost
t he
property
the worth
r epl acement
to
of
mi nus
in­
nor mal
depreciation.
Contingency
f und
usually
a state
the
appropriated
fire
state
insurance
value
property
to
cover
of
the
plan.
It
of
property
or
All-risk
policies.
l oss
f orm p o l i c i e s
property
at
or
are
one
the
Appraisal
impartial
Blanket
of
the
made by
all
A contingency
by
from e a r n i n g s
App ra ?s a I .
the
reserve.
resulting
br oa d
is
the
legislature
usually
state
is
and
state
fire
defined
amount
All-risk
location
of
or
the
start
ba c k
damage
to
program
to
t he
experts.
policies
that
to
a
as an e s t i m a t e . o f
from v i r t u a l l y
contract
paid
is
insurance
independent
f orm p o l i c i e s .
a single
reserve
are
all
perils.'
Blanket
covers
same t y p e
of
designed
or
br oad
aI I
types
property
15
at
mor e
than
one
location.
Concurrent
refers
to
insurance.
i n s u r a n c e whi ch
covers
same c o n d i t i o n s
as a n o t h e r
must
in o r d e r
be a v o i d e d
wh e r e
the
same p r o p e r t y
The
term c o n c u r r e n t
the
same p r o p e r t y
identical
to
is
policy.
prevent
insured
insurance
gaps
the
Nonconcur rency
?n t h e
under
under
mor e
coverage
than
one
policy.
Extended
coverage
coverage
endor sement
fire
insurance
loss
caused
riot,
civil
is
policy
policy
by w i n d s t o r m ,
c o mmo t i o n ,
unit,
policy
plus
Rate.
Rat e
usually
$100,
policies
on w h i c h
pr emi ums
if
the
school
hall,
and
is
all
per
used
policies.
the
insured
c o mp a n y ' s
should
never
policy.
as
l oss
added
to
riot,
and
to
the
include
strike
s mo k e .
A compr ehensi ve
provisions
of
the
blanket
damage c o v e r a g e .
the
to
This
can
term extended
coverage
vehicles,
property
year
the
explosion,
the
defined
The
a provision
extends
insurance
liability
as
aircraft,
includes
Assessable
public
defined
whi ch
C o mp r e h e n s i v e
insurance
endorsement.
cost
of
determine
term
refers
be a s s e s s e d
experience
purchase
insurance
is
the
to
per
p r e mi um.
those
on a d d i t i o n a l
excessive.
an a s s e s s a b l e
policy.
A
16
Insurable
refers
to
occu r e d ,
of
the
and
amount
there
principle
mor e
interest.
wer e
no
insurable
insured
insurance
woul d
value,
since
cannot
Consequential
loss.
it
lose
coverage.
district
this
l aw,
the
term
a school
than
and
that
The
interest
if
a
l os s
As a m a t t e r
may n o t
insure
lose
mor e
than
Consequential
l oss
is
for
its
interes t . ^
as a
but
loss
resulting
entail
selves,
the
directly
by f i r e
b ut
that
caused
did
is
the
insured
under i n s u r e d .
insurance.
to
the
the
peril
loss,
for
cold
example,
storage
damage
by
insured
the
caused
provisions
interrupting
the
against,
woul d
in­
t he m­
power
supply
unit.'^
The
bear
term c o i n s u r a n c e
a portion
Thus
it
of
becomes
Underinsurance
underwriter.
f'
a
in
not
spoilage
refrigerator
by
Such
provisions
Coinsurance.
make
covered
therefrom.
damage t o
directly
to
not
defined
First,
has
every
loss
a device
to
t wo p r i n c i p a l
insurance
a device
only
to
when he
prevent
under­
disadvantages
c o mp a n i e s
V^F r a n k A l b e r s , B i e n n i a l R e p o r t o f
T o r n a d o . Fund o f t h e S t a t e o f N o r t h D a k o t a ,
Dakot a P r o d u c t s , 1 9 6 4 ) , p . 127.
^7 Ibid., p. 126 .
is
are
expected
t h e F i r e and
( . Bi smar k : N o r t h
17
to
restore
before
the
plished
total
mor e
the
property
since
losses
the
value
higher
in
bears
.
the
the
written
there
with
insurance
is
amount ,
of
that
80 o r
he c o l l e c t s
If
in
protect
the
l oss
the
actual
under
per
cent
the
of
with
a $10,000
coinsurance
insurer
insurance
provisions
the
sound
the
carries
for
any
and
sound
= Re c o v e r y
clause,
full
total
'
coinsurance
insured
of
and a r e
r e q u i r e d . 10
x Loss
under­
probability
typical
the
t he
relatively
probability
of
in
be accom­
who a r e
b e t we e n
carried
required
i s, a b u i l d i n g
cent
90
he was
cannot
costs
and
The
required
coverage
required.
the
losses
insurance
I nsuranee
a 90 p e r
partial,
loss.
amount
Usually
it
probability
partial
to
individuals
than
partial
the
objective
unwilling
of
higher
same p o s i t i o n
Second,
proportion
amount
of
of
this
are
on t h e
any
to
Amount
Amount
if
is
for
contract.
is
losses
depend
prorates
carried
this
most
the
is
insure
insured
Thus,
p o l icyholder
property.
therefore
the
Obviously,
his
Rat es
clause
to
of
partial
loss.
of
the
value
to
policyholder
loss.
if
insured,
of
the
$9,000 of
■■
at least
partial
1^ Ma r k R . G r e e n e , R i s k and I n s u r a n c e ,
New Y o r k : S o u t h w e s t e r n P u b l i s h i n g C o . , 19 6 8 ) ,
value
l oss
( 2d e d . ;
p. 139.
up
to
the
less
face
of
he must
the
policy,
absonb
part
Agr eed- amount
waiver
value
of
or
written
the
for
All
policy
without
coverage
losses
r ecommended
under
that
are
rate
whereby
to
cover
This
By t h i s
all
schools
it
met hod
the
the
is
purchase
he c a r r i e s
refers
full
of
the
It
is
Loading
is
defined
an e x t r a o r d i n a r y
as
hazard
or
its
own
only
the
following
wo r k
are
The o r g a n i z a t i o n
destruction.
homogeneous
in
nature
^Albers,
op.
prop­
t he
of
written
that
if
has
they
The o b j e c t s
and v a l u e
c I t .,
p.
are
not
risk
to
of
to
a plan
loss.
conditions
subject
also
so t h a t
35.
refers
a sufficient
are
added
expense.
assumes
organization
so s i t u a t e d
is
highly
an amount
the
objects
of
insurance
Self-insurance
(I)
the
amount
Se T f - i n s u r a n c e .
met:
policy
amount
agreed
fire
a stipulated
the
value
to a
clause.^
will
t aneous
if
through
requirements.
Self-insurance
of
of
up t o
since
meet s
clause
requirement
paid
But
loss.
percentage
an a g r e e d - a m o u n t
Loadi n g .
the
clause.
penalty
carried
$9,000..
the
a mo u n t .
a stated
erty.
of
coinsurance
an a g r e e d
or
number
to
simul­
reasonably
calculations
as
to
S
19
probable
this
to
condition
predict
the
to
losses
satisfactory
of
the
expected
of
the
f und
loss.
accurate
and has
with
not
f und
f und
t o meet
is
of
will
to
must
t o meet
be w i l l i n g
large
sufficient
(3)
If
be a b l e
required
any
be c a r r i e d .
records,
range.
and
size,
The o r g a n i ­
or
have a c c e s s
it
t o make good e s t i m a t e s
enable
?t
is
successfully
guessing
handled
to
at
the
the
risk
size
of
1
practice
of
if
State
is
covers
an
fire
■
When t h e
the
should
state
instead
ca s h
t o meet
f und w i l l
plan.
property.
to
defined
A state
to-meet
All
commer ci al
by
the
pr emi ums
state
are
insurance
five
a
per
cent
wh a t
of
is
the
considered
a safe
coverage w r i t t e n ,
and
paid
into
c o mp a n i e s .
-
reaches
the
fire,insurance
'
f und
as
some eme r ge nc y
be a d e q u a t e
program a d m i n i s t e r e d
of
is
occur.
insurance
insurance
f und
t e r m non i n s u r a n c e
aside
that
l oss
specific
a state
usually
a
The
laying
no a s s u r a n c e
e me r g e n c y
plan
the
Otherwise,
Non i n s u r a n c e .
the
of
f und
should
loss.
a narrow
The o r g a n i z a t i o n
the
statistics,
within
organization
size
cash
Until
have
the
(2)
insurance
must
the
an a c t u a l
losses.
commer ci al
zation
present,
losses.
aside
unusual
is
be a c c u r a t e
accurately
expected
set
will
-
■
■
i J
level,
the
pr emi ums
20
are
to
reduced
be
used
or
eliminated
replenished.
to
increase
trative
costs.
e x a mi n e d
in
The
Mut ual
panies
are
do n o t
issue
I ncome
the
detail
size
state
in
of
capital
At
f unds
the
after
returned
to
or
and
of
to
f und
the
pay
needs
f und
is
adminis­
will
be
III.
by
Mu t u a l
its
insurance
p o l icyholders.
The p o l i c y h o l d e r s
operates
the
the
now i n o p e r a t i o n
companies.
sells
like
year,
if
policyholders.
If
is
are
me t ,
is
an a d d i t i o n a l
the
pays
insurance
there
there
com­
They
elect
insurance,
any o t h e r
requirements
may be a s s e s s e d
any e x c e s s
they
are
a deficit,
pr e mi um t o
each
cover
loss.
Stock
are
plans
f und
The company
legal
until
i nvestment
the
stock.
end o f
all
the
p o l icy hol der
the
of
owned and o p e r a t e d
and g e n e r a l l y
c o mp a n y .
from
Chapt er
insurance
company ma n a g e me n t .
losses,
altogether
defined
insurance
as
corporations
p e o p l e who w i s h
profit
for
the
losses
are
paid
distributed
to
companies.
to
invest.
stockholders
and e x p e n s e s
the
Reciprocal
whi ch
Stock
sell
They
insurance
capital
stock
c o mp a n i e s
to f i r ms
are
operated
to earn
who own t h e
c o mp a n y .
After
settled,
stockholders
underwriters.
as
any
profits
may be
a dividend.
Reciprocal
underwriters
a
are
those
underwriters
no p a i d - i n
the
capital
reciprocal
insured
policyholder
of
in
like
f r om whi ch
type
by a l l
who,
of
the
the
the
losses
contract,
others
in
mu t u a l
c o mp a n y ,
are
be p a i d .
each
the
organization
to
policyholder
gr oup
United
States
insurance
of
the
In
the
group.
amount
are
very
similar
organization.
Lon don.
who hav e
Associations.
and any o t h e r
who may s u f f e r
of
this
power
they
administer
Each member o f
insurance
to
The y a r e
country
to
Lloyd's
he has
the
the
a
loss.
reciprocal
patterned
an
group
agreed
Associations
appoint
to
,■ ■ .1
in the
type of
after
Lloyd's
attorneys-in-fact,
insurance
is
Under
is
'
Lloyd's
have
liable
accept
business
for
for
t he
on a p a r t i c u l a r
policy.2
0
20
John Ba i n b r i d g e , B i o g r a p h y o f an I d e a , The S t o r y
o f M u t u a l F i r e and C a s u a l t y i n s u r a n c e , ' (New Y o r k ; Do u b l e d a y
and Company, 1 9 5 2 ) , pi 15.
CHAPTER
I I
BACKGROUND OF
It
Is
complicated
they
This
are
familiarize
and
involved
field.
insurance
25 0 0 y e a r s
The
in
Code o f
r obbe d
by
his
of
The
family
of
early
contained
a preventable
from
that
the
public
school
field
of
is
make
that
Assyria
a
to
insurance.
presented
types
insurance
contend
Is
people,
terminology,
the
or
here
of
such an
basic
Ba b y l o n
i dea
some
era.^
insurance
as
business
for
the
ancient
2250
s y s t e m can
B. C .%
provisions
Code p r o v i d e d
make good h i s
true
the
Christian
a state
f o r m as
should
reason
the
in
Insurance
background
with
factors
fire
school
in
the
Some w r i t e r s
Hammur abi
insurance.
reader
other
idea
of
especially
originated
primitive
area
summary o f
before
that
specialists
the
coverage,
of
is
n ot
A brief
to
agreed
and d i f f i c u l t
administer.
since
generally
INSURANCE
that
loss;
The
for
a city
or
disorder,
if
the
be f ound
Babyl oni an
a type
i n wh i c h
a man w e r e
city
must
of
state
a man was
killed
i ndemni fy
treasury.3
^ H a r r y J . H a d l e y , "A S t u d y t o D e v e l o p , A n a l y z e , and
E v a l u a t e a S t a t e F i r e I n s u r a n c e P l a n f o r P u b l i c School Sy s ­
t ems i n West V i r g i n i a " ( u n p u b l i s h e d D o c t o r ' s d i s s e r t a t i o n ,
West V i r g i n i a U n i v e r s i t y , 1 9 6 8 ) , p . 3 1 .
2 Ibid.
p.
32.
3 1b i d . ,
p.
33.
23
Insurance
tutions,
is
and one o f
developed
one o f
the
societies
America's
least
most
valued
understood.
have a v e r y
c o mp l e x
All
insti­
highly
system o f
insurance
Though t h e r o o t s o f t h e i n s u r a n c e i d e a a r e
b u r i e d deep i n t h e p a s t , i t has r e a c h e d i t s f u l l e s t
f l o w e r i n g i n moder n t i m e s .
In i t s. t e c h n i c a l d e v e l ­
opment and w o r l d - w i d e e x p a n s i o n , i n s u r a n c e has made
mor e p r o g r e s s i n t h e l a s t h u n d r e d y e a r s t h a n i n t h e
previous thousand.
I t s r i s e as a s o c i a l f o r c e has
p a r a l l e l e d t h e r i s e o f c a p i t a l i s m and t h e e x t e n s i o n
o f t he d e m o c r a t i c sy s t e m.
I n i m p o r t a n t me a s u r e i t
has made b o t h p o s s i b l e .
I nsur anc e is i n d i s p e n s a b l e
t o a f r e e economy and a f r e e s o c i e t y b e c a u s e i t not
o n l y p r o t e c t s t h e v a l u e s p r o d u c e d by men and women
who wo r k f o r t h e m s e l v e s b ut f o s t e r s i n t hem t h e
c o n f i d e n c e t o p r o d u c e mo r e .
What ox y ge n i s t o t h e
a i r , i n s u r a n c e i s t o t h e e c o n o mi c and s o c i a l l i f e o f
our t i m e . ^
Estimates
people.who
own
understand
t hem;
company
of
the
that
insurance
55 p e r
company
after
the
raged
through
that
cent
churches,
Fire
the
of
heart
than
eve n
in
it
p.
17.
the
nor.fully
kind
forget
t o d a y was
1666.
This
London--destroying
public
buildings.^
ifJohn Ba I a b r i d g e , B i o g r a p h y o f
o f Mu t u a l F i f e and C a s u a l t y I n s u r a n c e ,
and Co. , 1 9 5 2 ) , pi TSl
5 I bid.,
read
of
of
the
name
them.5
London
and many o t h e r
cent
know one
cent
as we know
of
90 p e r
neither
do n ot
35 p e r
insures
insurance
Great
mor e
policies
f r o m a n o t h e r ; and
Fire
89
say
6Ibid.,
bor n
great
13,200
shortly
fire
houses
( Al though
an I d e a , The S t o r y
(New Y o r k : D o u b l e d a y
p.
23.
2k
only
six
people
died
in
the
f r o m s ho c k
and e x p o s u r e . )
10,689,000
pounds
time.
wa s
None o f
The
sterling,
the
hundreds
total
l os s
a staggering
property
w h i c h was
succumbed
was
later
estimated
amount
consumed
for
by
at
that
the
fire
insured.7
Shortly
established
In
fire,
1680
si mply
stock
the
Fire
company
capitalized
to
first
fire
property,
value.
about
based
The
on t h e
Fire
for
company
Office
was
the
This
company
be
of
the
five
first
It
was
These
pre­
insured
cent
per
per
called
insured
p r e mi u m.
10 p e r
and
Bar bon
England.
insurance.
t wo and o n e - h a l f
houses
in
fire
value
to
Nicholas
a new p r o j e c t
a fixed
rental
assumed
on b r i c k
Dr .
in
$200,000.^
pr emi um was
rental
firm
to w r i t e
amount
w h i c h was
one
insurance
The
organized
at
fire,
his
Office.
a fixed
miums w e r e
annual
the
Bar bon e x p a n d e d
the
houses
after
of
its
cent
cent
actual
for
the
on f r a me
houses. ^
The
came
in
successful,
its
challenge
16 8 1 when
g o v e r n me n t
as
first
fire
and
legality
Ibid.
the
City
insurance
it
was
to
of
the
I bi d
p.
Office
monopol y
London e s t a b l i s h e d
plan.
was aba ndone d
being
Fire
(This
plan
by c o u r t
did
order
questioned.)Within
25.
9 Ibid.
10
its
not
in
own
prove
1683,
a year
I b i d . , p . 26.
25
after
the
private
This
failure
the
company c a l l e d
firm
sold
successfully
The
ized
of
in
fire
for
the
insurance
in
mu t u a l
fire
I696.
It
Insuring
Ho u s e s ,
Ami cabl e
C o n t r i b u t I ons h i p ,
Ch a mb e r s ,
9 s the
Hand-in-Hand,
mu t u a l
insurance
success
in
the
was
of
this
Ltd.,
of
company
anc e
from
in
a
insurance
known
to America.
Carolina.
In
Charleston
and
The
f o r me d
charter,
1741
first
named
it
scale
and o p e r a t e d
gained
company was
the
f r om Loss
embl em.
wi de
organ­
Contributors
by F i r e
became p o p u l a r l y
fire
The
Hand-in-Hand
for
over
Un i o n A s s u r a n c e
by
of
after
actively
t wo h u n d r e d
for
known
idea
acceptance
The
is
the
The
in
successful
p.
26,
27.
first
1750,
fire
Society
fire
in
f or m o f
attempt
The
was o r g a n i z e d
Friendly
on F e b r u a r y
oldest
173:5.
a disastrous
the
11I b id . ,
f or me d.
was
the
engaged
years.
It
Company,
1905.^
Mut ual
royal
Society
large
Rooms
Co mme r c i a l
i n A m e r i c a was made
under
was
its
business
the
London
a new
insurance
but
c ompa ny .
by
on a
or
c o mp a n i e s
insurance
absorbed
Friendly
enterprise,
many y e a r s . ^^
first
London
g o v e r n me n t
at
Friendly
insur­
Society,
Sout h
destroyed
of
went
out
insurance
p.
fire
in C h a r l e s t o n ,
of
31.
most
b u s i n e s s . ^^
company was
Philadelphia.
12Ib id . ,
insurance
Be n j a mi n
13I b i d . ,
p.
41.
26
F r a n k l i n was
the
Uni on
the
Fire
to
sell
name was
c ha nge d
of
public
to
had
the
The
On Mar ch
25,
1752,
Philadelphia
was
firm
before
did
only
not
years
fire
gr ow
the
rapidly
Politically,
i n d e p e n d e n c e was a c h i e v e d ,
was
struggling
to
smal l
population
There
was
very
little
who owned a o n e - r o o m
Ho we v e r ,
Insurance
before
it
wo u l d
11tLbl d. ' ,
that
required
issue
p.
are
an
the
still
15Ib id .,
for
city
the
of
general
Revolution.^*1
company
the
to
in
political
i n s u r a n c e . ^^
form of
the
of
Con­
g o v e r n me n t
country
had a
agricultural.^
insurance
developed
in
use
inspection
on
The
from peopl e
the w i l d e r n e s s .
company
insurance
49.
fire
in
qualify.
the A r t i c l e s
completely
for
cabin
Franklin's
practices
Contributionship
demand
l og
conducive
Economically,
al most
company was
the
since
and a r e p u b l i c a n
survive.
and was
very
called
Philadelphia
insurance
climate
wer e w r i t t e n ,
not
to
t h e A me r i c a n
and e c o n o mi c
federation
was
Thus,
available
thirty-two
the
this
Contributorship
by F i r e .
insurance
years
company was
t o a ny one who c o u l d
f r o m Loss
next
Contributorship
America.
his
the
fire
twenty-four
For
and
insurance
Houses
Philadelphia
organizer,
Company.
expanded
Insurance
chief
it,
p.
of
and
48.
several
today.
every
if
sound
The
building
necessary,
l6 Ibid.,
p.
49.
27
required
of
risk
c ha nge s
to
bring
ma n a g e me n t .
This
beginning
of
procedure
established
became an
integral
The
of
English
science
usual
insurance
The
the
in
without
considering
it
struction,
rating
of
the
f r a me
by
occupancy,
taking
into
and g e n e r a l
the
English
wrote
all
for
a term of
early
life.
The g r o w t h
fact,
than
after
at
the
ten years
end o f
defect
was
public
confidence.
provisions
of
the
lack
the
of
the
the
risk.
buildings
the
the
of
of
operation.
In
1763
Contributionship
P. 50.
f und
seemed
con­
risk.^
company
its
first;
whi ch
a reserve
on each
during
condition
to
p . 51.
in
was wo r s e
The ma j o r
hold
made
and h e n c e f o r t h
18 I b i d . ,
and
each
the
the
reserves
the
of
Franklin's
sl ow a t
cost,
rates
rate
consideration
seven y e a r s
year
whi c h
or
of
to e s t a b l i s h
17 I b i d
brick
practice,
r ude
rate,
circumstances
its
the
inspection
of
applied
company was
first
the
character
operation
was
b u s i n e s s . ^7
determined
In accor dance w i t h
policies
for
standard
selectivity,
quality
and
particular
a high
The
setting
rate
Contributionship
insured
of
the
constructions,
the
risks.
insurance
was o f
had one
up t o
inspection
principle
accordance wi t h
for
building
of
practice
c o mp a n i e s
The
property
system of
the
part
another
property.
the
back
28
business
expanded
In
year
1810
policies
insurance.
This
So ut h
Loss
practice
wh e r e
is
it
is
practice
Fourth,
is
from
insurance
taken.
condition
of
the
insured
Once
the
insurance
ti me
selling
insurance
firms
Wi t h
a brief
This
in Ameri ca,
present
These
to
there
this
field,
makes
first
idea
over
wha t
especially
of
caught
of
Houses
at
212
to
amount
of
the
pay me nt
the
^lbid.,
p.
54.
20Ibid.,
p.
57.
22Ibid.,
p.
57.
2^ lb id .,
p.
16.
if
the
generally
At
States.
people.
about
J
insurance,
currently
to
t he
c ompa ni e s
United
a million
regard
t he
u n c h a n g e d . ^2
rapidly.
happeni ng
with
The
deposit
last
background
the
To o b t a i n
insurance
in
in
been a
on and was
gr ew
types
half
OI
a cash
and
5,000
is
has
today
r e ma i n s
business
al most
it
Insurance
cent
property
historical
of
the
business
per
the
various
e mpl oy w e l l
examination
insurance
the
are
of
three
is
b ut
Pennsylvania.
owner
company o f
accepted
t wo
the
known e x c e p t
some c o m p a n i e s .
for
seven
known as p e r p e t u a l
widely
doi ng
Philadelphia,
insurance,
is
available,
for
still
ceased w r i t i n g
wh a t
not
Contributionship
by F i r e
perpetual
Contributionship
began w r i t i n g
successful
Philadelphia
from
the
and
f ew c o m m u n i t i e s
highly
rapidly. ' ^
schools,
21Ibid.,
in
t he
will
p.
60
29
be h e l p f u l .
The d o l l a r s
United
States
twenty-four
expansion
policies
Table
in
I
and
shows
19^3 we r e
pr emi ums
and
for
under
increased
that
about
the
same
t wo and o n e - t h i r d
reason
blanket
value
total
types
type
Yea r
of
$
OIl
or
of
coverage
during
the
increase
property
for
fire
included
insurance.
coverage
t he
compr ehensi ve
the
This
fire
in
the
past
is
the
type
insured.
insurance
Fire,
In
Ex t e n d e d
1967
had
increased
Pr emi ums W r i t t e n
1943-1967
total
to about
billion.
Insurance
713,062,000
749,540,000
803,951,000
I ,047,167,000
I ,197,577,000
1,292,788,000
1,328,391,000
I
Extended
Cove r a g e
F i re
1943
1944
1945
1946
1947
1948
1949
of
for
pr emi ums
Table
Fire
insurance
substantially
854 m i l l i o n .
related
the
fire
The m a j o r
coverage
the
for
increased
years.
of
Coverage,
ha v e
spent
$ 75,458,000
91,523,000
111,861,000
171,673,000
199,009,000
227,991,000
255,956,000
I nsur ance Facts 1968,
I n f o r m a t i on I n s t i t u t e ) , p. 2 2 .
(New Y o r k :
Allied Fire
Lines
$ 65,326,000
78,874,000
77,209,000
91,946,000
103,799,000
93,223,000
89,401,000
I nsurance
30
Table
Year
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961
I 962
1963
1964
1965
I 966
1967
$1
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
(continued)*
Fire
Extended
Cove r a ge
,407,857,000
,503,579,000
,506,946,000
,434,379,000
,545,894,000
,560,549,000
,582,563,000
,593,996,000
, 6 2 6 , 16 7 , 0 0 0
,709,257,000
,667,385,000
,619,076,000
,623,146,000
,571,957,000
,533,481,000
,548,139,000
,605,668,000
,650,000,000
$296,797,000
359,814,000
399,824,000
434,865,000
481,804,000
557,523,000
597,282,000
608,725,000
625,977,000
632,407,000
573,946,000
539,414,000 •
522,085,000
501,945,000
489,920,000
481,213,000
478,571,000
475,000,000
,
* Insurance Facts 196 8,
l n f o r m a t i on I n s t i t u t e ) , pi 2 2 .
This
type
the
of
insurance
United
of
this
if
the
States,
magni tude
cost
can
Fire
trophic
represents
in
or
about
$11.70
about
deserves
capita
careful
Insurance
expenditure
for
$45.00
$ 81,486,000
93,948,000
I 08,669,000
112,842,000
I 14,804,000
I 19,858,000
I 17,324,000
103,735,000
I 40,619,000
147,176,000
164,964,000
170,116,000
193,433,000
196,752,000
I 88,197,000
186,041,000
I 97,032,000
210,000,000
per
every
one
individual
family.
analysis
for
to
in
Any e x p e n s e
determine
be j u s t i f i e d .
l oss
this
of
a per
(New Y o r k :
A llied Fire
Lines
has
been
country.
frequent
Table
A.
and a t
2 on page
t i mes
catas­
31 contains
some
31
celebrated
fires,
caused.
It
a great
deal
is
of
communi t y wh e r e
and
the
obvious
f r om
e c o n o mi c
they
amount
the
l oss
ma t i o n
that
the
owner s
loss
fire
they
losses
involved
cause
and
the
occurred.
Major
1835
1866
1871
1901
1906
1916
1922
1934
1941
1945
1950
1953
1955
1957
1958
1959
1961
1963
1963
1964
property
table
to
Table
Year
of
Fires
2*
Property
Location
New Y o r k C i t y
P o r t l a n d , Me .
C h i c a g o , 111.
Jacksonville, Fla.
San F r a n c i s c o , C a l .
P a r i s , T exa s
A s t o r i a , Ore.
L e x i ng t o n , Ky .
F a l l s R i v e r , Mass.
Dunedin, F l a .
Kansas C i t y , Mo.
L i v o n i a , Mi ch.
W h i t i n g , I nd .
B u t l e r , N. J .
Signal H i l l , Cal.
F r e m o n t , Ca I .
Los A n g e l e s
Pine B l u f f , Ark,
B a y o n n e , N. J .
J e r s e y C i t y , N. J .
* I ns u r anee F a c t s ,
I n s t i t u t e ) , pi 44.
Loss
Property
Loss
13 A c r e s o f B u i l d i n g s
I 500 B u i l d i n g s
17,430 B u i ldings
I 700 B u i l d i n g s
28,000 Buildings
I 440 B u i l d i n g s
30 Busi ness B l o c k s
Wa r e hou s e
Rubber p l a n t
Jui ce packing p l a n t
Ru bbe r wa r e h o u s e
Aut o p l a n t
Refinery
Rubbe r p l a n t
R e f i nery
Ca n n e r y
Houses
Wa r e h o u s e
Factor y area
P i e r s S wha r v e s
1968,
(New Y o r k :
Esti mated
Loss
$15,000,000
10,000,000
175,000,000
I I ,000,000
350,000,000
I I ,000,000
5,000,000
3,000,000
I I ,000,000
2,500,000
2,500,000
50,000,000
20,000,000
14,000,000
9,000,000
2,600,000
25,000,000
3,525,000
10,500,000
10,000,000
Insurance
Infor­
32
stitute
ten
In a v i v i d
description
shows
since
t i mes
in
and w a r n i n g
that
spite
of
1875
better
the
fire
Insurance
losses
protection,
Information
hav e
increased
fireproof
In­
over
materials,
syst ems.
The d o l l a r v a l u e o f p r o p e r t y damaged o f d e s t r o y e d by
f i r e i n t h e U n i t e d S t a t e s e x c e e d e d $1 b i l l i o n each
y e a r s i n c e 1 9 5 7 , as c o n t r a s t e d w i t h an a g g r e g a t e l o s s o f
$78 m i l l i o n i n 1 8 7 5 , t h e y e a r t h e f o r m e r N a t i o n a l Boar d
o f F i r e U n d e r w r i t e r s s t a r t e d t o t a b u l a t e such d a t a on an
annual b a s i s .
The s t e a d y r i s e i n e s t i m a t e d f i r e l o s s e s
o v e r t h e y e a r s i s r e f l e c t e d i n t h e t a b l e b e l o w . 25
Table
U. S.
Fire
Year
Aggregate
P r o p e r t y Loss
1875
1880
1885
1890
1895
1900
1905
1910
1915
I 920
1925
1930
1935
1940
1945
$
. i
,
o;;:.
Los s e s
(I .
78,102,285
74,643,400
102,818,796
108,993,792
142,110,233
160,929,805
165,221,650
214,003,300
I 72,033,200
447,886,677
559,418,184
501,980,624.
235,263,401:
285,878,697 ,
484,274,000
* Insurance Facts, 1968,
I n f o r m a t i on I n s t i t u t e ) , p . 37
25 I b i d . , p.
37
3*
1875-1967
Year
1950
1955
1956
1957 .
1958
1959
I960
1961
1962
1963
, 1964
1965
1966
1967
Aggregate
P r o p e r t y Ldss
$
.
(New Yor k :
.
648,909,000
885,909,000
989,290,000
1,023,190,000
I ,056,266,000
1,047,073,000
I , I 07,824,000
I ,209,042,000
I ,265,002,000
I ,403,558,000
.1,367,128,000
.1,455,631,000
1,496,755,000
'1,706,717,000
; ■'
Insurance
33
Tables
staggering
States.
one
amount
3 on pages
of
property
A c ompa r i son
insurance
year
2 and
pr emi ums
reported.
considers
of
The
that
part
c o mp a n i e s
operating
are
c o mme r c i a l
of
by
structures
Table
all
fire
tained
l osses
27.5
appears
anc e
per
the
risk
is
exceed
is
large
of
school
p.
the
total.
property
should
2.3
enjoy
a favored
to de­
we r e
wh i c h
Of
sus­
t o be a
accounted
information
insurance
of
fires.
1966.
cent
be a p r e f e r r e d
of
t ypes
of
appears
l osses
From t h i s
should
per
in­
high.
frequency
for
t hus
the
cost
not e whi ch
i n s t i tut i o n s . T h i s
residential
the
subject
information
when
insured,
very
is
fire
in ever y
Either
or
is
to
highest
1966 o n l y
n ot
profit
structure
suffered
to
that
l oss
losses.
interesting
in
total
c ompa ni e s
the
the Unit ed
reveals
losses.were
of
in
t he
eve n mor e m e a n i n g f u l
this
compa r e d
26Ibid.,
tables
34 p r e s e n t s
cent
and
type
suffer
by e d u c a t i o n a l
l ow p e r c e n t a g e
for
It
typically
4 on page
a
insurance
fire.
from f i r e
uninsured
ma k i ng
Any c o m b u s t i b l e
struction
the
the
t wo
far
c o mp a r i s o n
no pay me nt was made on
surance
l oss
these
collected
3 1 and 3 2 i l l u s t r a t e
fire
it
insur­
rate.^72
6
40.
2 7 p a u l B. S a l mo n , F i r e I n s u r a n c e P r i n c i p l e s and
P r a c t i c e s i n Sc hool D i s t r i c t s E mp l o y i n g N a t i o n a l l y
A f f i l i a t e d B u s i n e s s O f f i c i a l s , Bul I e t I n No . 18, ( Evans t o n :
A s s o c i a t i o n o f Sc hool B u s i n e s s O f f i c i a l s o f t h e U n i t e d
S t a t e s and Ca n a d a , 1 9 5 8 ) , p. 3 9 .
Table
Fires
m
by Oc c upa nc y
in
1966
-D
(D
-h
-h
—•
O
c
o.
O
fl)
cr
n>
rt
o
fl)
3
>
rt
O
D
fl)
C
Ul
CL
Ul
Ul
O
3
Cr
CU
Unreported
Institutional
o
4*
Ul
*<
* I n s u r a n c e Fa c t s 1 9 6 8 ,
I n f o r ma t i on I n s t i t u t e ) , pi ^To.
3
CD
(New Yor k :
I nsurance
35
Fires
number o f
Some o f
in
deaths
the
public
property
throughout
maj or
the
catastrophes
Year
1930
1937
1908
1929
1958
1923
1949
1957
1963
1931
1950
1918
1967
1924
1953
state-owned
property.
insurance
plan
dema n di n g
and
the
the
in Table
Hopefully,
incidence
of
5.
Fires
(New Y o r k :
casualties
inspection
States „
Number o f
De a t h s
State Pe nitentiary
C o n s o l i d a t e d School
L a k e v i e w School
Cleveland Hospital
Our Lady o f t h e A n g e l s
School
C l e v e l a n d Sc hool
Hospital
N u r s i n g home
N u r s i n g home
Home f o r Aged
Me r c y H o s p i t a l
H o s p i t a l f o r I nsane
Pri son Barracks
Ba b b ' s S w i t c h School
N u r s i n g home
, .
* Insurance Facts, 1968,
I n f o r m a t i o n I n s t i t u t e ) , pi 4 7 .
fire
United
Property
B e u l a h , So ut h C a r o l i n a
E f i f i ngham, I l l i n o i s
Warrenton, Missouri
F i i t c h v i I I e , Oh i o
P i t t s b u r g , Pa.
D a v e n p o r t , I owa
No r ma n , Okl ahoma
Berrydale, Florida
H o b a r t , Okl ahoma
,Largo, Florida
the
the
presented
in Major
C o l umbus, Oh i o
New L o n d o n , T e x a s
C o l l i n w o o d , Oh i o
' C I e v e l a n d , Oh i o
Ch i c a g o , I l l i n o i s
of
of
a substantial
5*
L o c a t i on
All
c a us e d
history
are
Table
De a t h s
hav e
listed
under
maj or
fires
77
74
72
63
48
41
38
38
36
35
Insurance
a bo v e
a state
requirements
320
294
175
125
93
occurred
in
fire
woul d
be more
woul d
be
reduced.
36
Total
imately
fire
12,200
of
during
Ab o u t
half
about
one-third
these
specifically,
1966.
but
when
Table
3,
fires
I960
of
these
appear
it
represents
page
of
37,
650
1965»
From t h e
wer e
caused
r oom.
Also,
most
fires
we r e
wer e
f ewer
Three
fire
school
safety
losses
fire
less
fires
table
the
for
started
fire
This
of
it
during
is
for
large
cause
for
shown
in
the
in
total.
period
many
the
class­
when
t he
r eason
deaths.
precautions
wo u l d
s u b s t a n t i a l I y . 3®
probably
First,
reduce
adequate
exits
2 8
H a r r y J . H a d l e y , "A S t u d y t o D e v e l o p , A n a l y z e ,
and E v a l u a t e a S t a t e F i r e I n s u r a n c e P l a n f o r P u b l i c School
Sy st e ms i n West V i r g i n i a " ( u n p u b l i s h e d D o c t o r ' s d i s s e r ­
t a t i o n , West V i r g i n i a U n i v e r s i t y , 1 9 6 8 ) , p. 4 3 .
2^ i b i d . ,
for
p.
79
and
year
that
night
probably
in
loss,
the
six
faults
the
fires
1966,
appears
fires
$34,500,000.
3% o f
the
1966.
home, and
college
t han
approx­
school
l oss
l oss
by e l e c t r i c a l
unoccupied.
the
be a v e r y
s u mma r i z e s
school
fires
buildings
total
to
wer e
100 o v e r
in
and
in a d o l l a r
page
origin
occurred
school
the
6,
of
Concerning
6,900
resulted
States
increase
to
32,
United
children.
school
school
an
compar ed
through
there
the
deaths
we r e
figures
Table
place
we r e
in
1967,
fire
there
These
In a b s o l u t e
deaths
48.
3 0 Lewy O l f s o n , "How Many o f Your S c h o o l s Ar e Ri p e
a F i r e , " Sc hool Ma n a g e me n t , X I I , ( A p r i l , 1 9 6 8 ) , p. 5 8 .
37
Table
Analysts
Cause o f
Fire
Electrical faults
Suspicious i ncendiar y
H e a t i n g and c o o k i n g
Smoki ng o r ma t c he s
Lightening
Sp o n t a n e o u s
Gas l e a k s
Outside f i r e
Mi see I l aneous
Un de t e r mi ne d
P I a ce
of
of
Sc hool
No.
Pe r
Cent
180 ■ 3 2 . 5
22.2
123
76" 1 3 . 7
47 " 8 . 5
6.7
37
36
7.7
11
2.0
I .2
7
47
8.5
96
%50
■l o o
Fires
1960-1966
When F i r e s
Start
M T d n i g h t - 6 a . m.
6 a . m. - noon
. Noon- 6 p . m.
6 p.m.-midnight
No .
Pe r
Cent
212
123
149
166
£50
32.6
18.9
22.9
25.6
I 00
How
Di s cov e r ed
Origin
C l a s s room
F u r n a c e room
S t o r a g e room
Unused room
St age
Auditorium
F l o o r or c e i l i n g
Gymnasi um
Hallway
Ma n u a l t r a i n i n g room
Office
i
Laboratory
Janitor's, closet
Wa l l ,
L o c k e r room
Kitchen
Under , bui l d i n g
Mi sc el l ane ous areas
U n d e t e r m i ned
6*
I 20
82
57
52
42
35
32
25
25
20
19
16
14
13
I0
9
8
38
33
650
19.4
13.3
9.2
8.4
6.8
66.9
435
188
28.9
15
2.3
syst em 12
1.9
I 00
6 501
Outsiders
Oc c u p a n t s
Explosion
Automatic
5.7
5.2
4.1
4.1
3.2
3.1
2.6
2.3
2. 1
1. 6
1.4
1.3
6.2
1-
100
.
, . . . . . . * Lewy 0 1 f s o n , "How Many o f Your S c h o o l s Ar e Ri p e
a F j. r e , ■Sc hool M a n a g e me n t , X l l ( A p r i l , 1 9 6 8 ) , p. 5 8 .
for
38
as
defined
every
with
in
the
Life
school.
Next,
fireproof
doors.
protected
facts
than
about
6,560
least
one
A death
untold
fire
is
1967,
an
increase
1966,
According
to
property
quantity
during
of
that
expenses
and
Third,
is
of
building
about
the
goods
the
is
in
day
entire
United
in
every
every
fires
to
be
than
some f r i g h t e n
That
to
the
of
fires
Lastly,
in
over
means
at
house.
resulting
in
nation
$1,706,717,000.
over
the
19 6 6 .
United
previous
relation
is
more
s o me o n e ' s
Insurance Association,
in
are
c o mmu n i t y and
in
percentage
to
the
half
the
States
year.
the
l oss
total
d e c l i n i n g . 3^
relation
There
to
This
t he
school
total
fires
by a r s o n i s t s . ^
32 i n s u r a n c e
Ioc.
the
reported
fire
33q I f son,
in
cent
to
3^ I bid.
should
There
country.
14 p e r
ea c h y e a r
started
States.
amount ed
mor e
note
43 m i n u t e s ,
l oss
about
A me r i c a n
this
subject
1966 w e r e
in
be c l o s a b l e ,
school
to
b7 s e c onds
losses
declining.
should
interesting
the
50,000
by f i r e
the
be p r o v i d e d
s y s t e m . 3^
social
fire
Code s h o u l d
stairwells
by f i r e
in
970,000
means
starts
e c o n o mi c
wer e
of
every
caused
is
it
fires
fires
This
during
all
by a s p r i n k l e r
I n summar y,
i ng
Safety
cit.
Facts
1 9 6 8 , op.
c i t .,
p.
35.
39
Legal
SOCI AL AND ECONOMIC
I MPLI CATI ONS
authorities
classify
as
aleatory
to
an u n c e r t a i n
insurance
with
none e x i s t e d
eliminating
In a c t u a l
l oss
for
contracts--a
event.
helps
to
the
values
or
greatly
practice,
insured.
certain
Gr e e n e
the
out c ome
creates
is
a met hod
an a l r e a d y
loss--the
p r e mi u m.
presents
as a u s e f u l
brings
several
risk.
uncertain
device
e c o n o mi c
wh e r e
of
existing
large
subject
confuse
a new r i s k
a
and
policies
is
to
exchanges
serves
risks
insurance
many p e o p l e
insurance
reducing
then,
to e l i m i n a t e
i n wh i c h
Ga mb l i n g
insurance
but
to
causes
b e f o r e , whereas
a small,
of
case
This
gambling.
Insurance,
it
tend
in
that
advantage
e c o n o mi c
and
social
i n s u r a n c e . 35
1.
The amount o f a c c u m u l a t e d f u n d s
p o s s i b l e losses is reduced.
2.
Cash r e s e r v e s t h a t i n s u r e r s a c c u m u l a t e a r e f r e e d
f o r i n v e s t m e n t p u r p o s e s , t hus b r i n g i n g a b o u t a
b e t t e r a l l o c a t i o n o f e c o n o mi c r e s o u r c e s and
increasing production.
3.
S i n c e t h e s u p p l y o f i nves t a b I e f u n d s i s g r e a t e r
t h a n w o u l d be t r u e w i t h o u t i n s u r a n c e , c a p i t a l i s
a v a i l a b l e a t a l o we r c o s t t h a n woul d o t h e r w i s e
be t r u e .
3 ^Ma r k R. G r e e n e , R i s k and
(New Y o r k : S o u t h w e s t e r n P u b l i s h i n g
35 I b i d . ,
p . 66.
needed
t o meet
I nsu r a n e e , 2d e d . ,
Co. , 19 6 8 ) , p . 63.
40
4.
The o r g a n i z a t i o n w i t h
better credit risk.
5.
Insurers a c t i v e l y
activities.
6.
Insurance c o n t r i b u t e s
s t a b i l i t i e s and p e a c e
p r o p e r t y and l i f e .
Since
ance,
they
insurance
schools
could
for
e ng a ge
many s c h o o l s
enjoy
these
be
other
adequate
in
has
gov er nment
of
benefits.
Ho we v e r ,
f unds
woul d
the
subject
to
that
general
purpose
g o v e r n me n t
has
laid
conduct
business
such
of
the
the
Therefore,
the
industry,
insurance
special
differentiates
36Ibid. ,
of
to
the
of
the
down
activities,
and
c ause
rules
Lnsurance
control.
of
often
cost
INSURANCE
c ha mpi on
The
insur­
be a v a i l a b l e
and
that
and
said
protect
insurance
advance
the
public
Be caus e
regulation.
if
carry
needs.
been
to
the we a k .
governing
is
is
a
t o b u s i n e s s and s o c i a l
o f mi nd by p r o t e c t i n g
i n Mo n t a n a a l r e a d y
reduced,
is
loss-prevention
GOVERNMENT REGULATI ON OF
Lt
insurance
is
subject
benefits
are
p.
not
713.
from
social
it
characteristics
from a t r a d i n g
to
extensive
insurance
realized
until
are
type
of
of
g o v e r n me n t
paid
a distant
for
in
future3
6
date.
Thus,
ent
defend
to
wh i c h
f ew
advantage
known a t
to
person
his
ma k i ng
rights.
ance
of
the
Court
of
purchaser.
Also,
the
t i me
of
sale,
t o o much o r
by
the
of
n ot
field,
to
it
This
type.
vs.
In
decision
Underwriters
federal
statute,
was
This
regulation
the
several
Clayton
states.
Act,
ti me
It
also
woul d
lapse
3 7 1b i d . ,
if
p.
apply
the
71 5
to
states
of
in
insur­
a bu s e s
careful
1944
case.
in
the
regulation
States
the
by t h e
Supr eme
right
of
by Co n g r e s s
the
insurance
provided
that
Act,
t he
and
insurance
did
38,bid.,
n ot
p.
South­
Consequently,
common I y c a l l e d
pa s s e d
Robi nson- Pat man
Commi ssi on A c t
year
was
been
p o w e r s . 3^
Law 15,
Act,
not
sales.
a state
established
reversed
HcCarver-Ferguson
ha v e
early
that
are
to obt ai n
hav e
of
take
costs
1868 a U n i t e d
Association
Public
returned
states
Virginia,
regulatory
eastern
l aw
I I
could
be a t e m p t a t i o n
practices
Be caus e
needed.
Paul
increase
a
mi ght
in o r d e r
insurance
be p r e s ­
a c o mp l e x a g r e e m e n t
insurance
became a p p a r e n t
was
decision,
enough
is
may not
insurer
so t h e r e
s t a t e s . 37
some
industry
states
Insurance
so t h e
officer
insurance
purchase
understand,
Traditionally,
regulated
the
l aymen
the
charge
the
the
regulate
718.
the
in
1945.^
industry
to
Sher man A c t ,
Federal
after
a
Trade
a three
insurance
3 9 , bid.
p.
722.
42
activities
those
in
the
portions
coercion,
and
areas
of
the
covered
by
Sher man A c t
intimidation
we r e
these
acts.
relating
to
apply
to
to
Finally,
boycotts,
insurance
activities.
Fr om t h e
a bo v e
g o v e r n me n t
has
been
activities
for
at
c o mme n t s ,
closely
least
the
a complicated
r ecommended
insurance
task.
of
The
last
one
apparent
that
state
with, insurance
hun d r e d
years.
INSURANCE PROGRAM
a sound
fire
following
in e s t a b l i s h i n g
is
associated
ADMI NI STERI NG AN
Establishment
it
insurance
procedure
and m a i n t a i n i n g
has
program
is
been
a good
fire
p r o g r am.
1.
Pl a c e r e s p o n s i b i l i t y f o r t he school i n s u r a n c e
pr ogr am.
In s m a l l e r school d i s t r i c t s t h i s w i l l
u s u a l l y be t h e s u p e r i n t e n d e n t o r h i s a s s i s t a n t .
2.
O b t a i n a r e l i a b l e a p p r a i s a l of t he school
p r o p e r t y , p r e f e r a b l y f r o m an o u t s i d e , i n d e p e n d e n t '
expert.
T h i s p r a c t i c e may be somewhat e x p e n s i v e ,
b ut an a c c u r a t e e v a l u a t i o n o f t h e d i s t r i c t
p r o p e r t y is e s s e n t i a l .
3.
D e t e r m i n e t h e met hod t o u s e .
The b u i l d i n g s and
c o n t e n t s may be i n s u r e d f o r r e p l a c e m e n t v a l u e ,
sound v a l u e , c o s t o r c o i n s u r a n c e may be u t i l i z e d .
4.
P r o v i d e school f or ms.
the proper i n f o r m a t i o n
This w i l l insure that
i s k e p t and i s a v a i l a b l e
^ 0 He n r y H. L i n n , and S c h u y l e r C. J o y n e r , I n s u r a n c e
P r a c t i c e s ' i n Sc hool A d m i n i s t r a t i o n , (New Y o r k : Ro na l d P r e s s ,
1 9 5 2 ) , p. 7 6 .
43
for
use
by s c h o o l
officials.
5.
Secure a l l p o s s i b l e r a t e r e d u c t i o n s .
At t h i s t i me
i t can be s a i d t h e r e a r e many ways t o r e d u c e r a t e s .
E x p e r t a d v i c e can be o f g r e a t h e l p i n t h i s a r e a ;
such p e o p l e as s a f e t y e n g i n e e r s , f i r e a d j u s t o r s ,
and t h e F i r e M a r s h a l l can p r o v i d e s u g g e s t i o n s on
r e mo v i n g h a z a r d s .
6.
M a in t ai n adequate records.
Re c or ds o f a p p r a i s a l s ,
c o n s t r u c t i o n c o s t s , i n v e n t o r i e s and t h e l i k e must
be k e p t up t o d a t e i f t h e i n s u r a n c e p r o g r a m i s t o
be c u r r e n t .
7.
E s t a b l i s h a pl an f o r d i s t r i b u t i n g the i nsur ance to
c o mp a n i e s o r a g e n t s .
T h i s r e q u i r e s t h e s c h ool
board t o s e t p o l i c i e s f o r t he a d m i n i s t r a t i o n of t he
school i n s u r a n c e pr ogr ams.
I nsurance business
s h o u l d be p l a c e d on an o b j e c t i v e b a s i s e i t h e r by
c o m p e t i t i v e b i d o r h a v i n g some c r i t e r i a t h a t
c o mp a n i e s must meet t o q u a l i f y f o r p a r t i c i p a t i o n .
8.
O b t a i n maxi mum a d j u s t m e n t s f o r l o s s e s ( i f or when
they o c c u r . )
Loss s e t t l e m e n t can d e v e l o p i n t o
c o m p l i c a t e d a r r a n g e m e n t s , a r g u m e n t s , and even
l e g a l a c t i o n s u n l e s s t h e a d m i n i s t r a t o r i s we I I v e r s e d i n t he r i g h t of t he school under t he
i n s u r a n c e c a r r i e d . 41
These
eight
person
responsible
degree
of
board
and d i r e c t i o n
needs
job
a working
41 I b i d .
the
need
for
to
have
some
the
insurance
program
in
the
Insurance
field
for
the
school
district.
to
superintendent
usually
in
illustrate
for
expertise
do an a d e q u a t e
school
requirements
l ooks
technical
k n o wl e d g e
the
matters
of
such
such as
i t e ms
as
if
he
is
Since
goi ng
for
of
to
t he
advice
insurance,
types
the
he
policies,
endorsements,
as w e l l
as
coinsurance,
local
and
state
concurrency,
rate
building
safety
and
maki ng,
claims,
codes.
TYPES OF COVERAGE
There
endor sement s
are
several
available
c ompa ni e s.
Every
coverage
available
school
to
is
purchase
type
can
of
be based
included
all
the
in
extended
reduce
t i me
policies
in
probl em.
cost.
t wo o u t c o m e s .
money
an a g r e e d
all-risk,
pr ogr am,
Overall,
at
best.
If
t o o much
is
being
his
in
deal
decisions
decision
insurance
expended
is
fire
standard,
one
t he
company
the
con­
be a d e q u a t e
are
difficult
results
carried,
needlessly.
be
consider
to
with
c o i n s u r a n c e wo u l d
A wr ong
should
f or m,
t han
insurance
must
property,
t he
values,
clause
broad
mor e
he must
these
of
from s t r a i g h t
If
insurance
considering
official
and
insurance
particular
how much
amount
blanket,
endorsement .
Perhaps
do
and/or
know wh a t
r epl acement
school
institutional
the
to
The amount
sound v a l u e s ,
types
c on s umi n g
payers'
be p u r c h a s e d .
of
needs
problem w i t h o u t
The
public
will
policies
and mu t u a l
decide
policy.
coverage
the
to
the
participates
currency
it
perhaps
through
assessable,
stock
or
various
insurance
to
on c o s t ,
coinsurance,
trying
be a m a j o r
insurance
insurance
administrator
and wh a t
Even
can
of
f rom bot h
school
district.
types
If
and
and
i n one o f
the
t oo
tax­
little
45
Is
carried
hardship
will
and
on
happen
there
the
to
is
a
loss,
c ommuni t y
the
it
will
involved,
school's
to
public
place
say
an e c o n o mi c
nothing
relations
with
of
what
that
comm'un i t y .
RATI NG
expects
In
selecting
to
do b u s i n e s s
be t h e
c o mp a n y ' s
widely
used
to e v a l u a t e
insurance
economy o f
adequacy
of
are
general
reliability
sec ond
type
There
or
are
mor e )
(good),
of
consideration
the
Best's.
best
This
known and most
service
attempts
adequacy
of
and
s ou ndne s s
The
the
ratings
" C+ "
first
company
are
" A+ "
(fairly
reflects
investment.^
type
the
c o mp a n i e s
evaluates
from the
and
" C"
net worth
large
^ M a r k R. G r e e n e , R i s k and
(New Y o r k : S o u t h w e s t e r n P u b l i s h i n g
The
t he
p o licyholder's
(excellent),
good),
f r o m AAAAA f o r
smal l
of
reserves,
" B+"
(very
(fair).
The
of
the
c o mp a n y .
firms
( 25
million
(250,000
or
^ C l i f f o r d H . A l l e n , Sc hool I n s u r a n c e
(New Y o r k : The M a c M i l l a n C o . , 1965 ) , pi Tol
44 I b i d .
shoul d
ma n a g e me n t ,
rating
CC f o r
is
school
underwriting
of
15 r a t i n g s
to
a p r i me
the
on t h e i r
t wo t y p e s .
These
" B"
with,
company
c o mp a n i e s
surplus,
ratings
good),
insurance
service
results,
viewpoint.
the
r a t i n g . P r o b a b l y
rating
of
INSURANCE COMPANIES
l e s s ) .44
Administration,
I n s u r a n c e , 2d e d . ,
C o . , 19 ^ 6 ) , p. 14 9 .
46
Allen
Best's
r ecommends
rating
of
at
c o v e r a g e . T h i s
record
that
least
A : AA f o r
implies
and a s t r o n g
school
districts
most
types
a company w i t h
financial
require
of
insurance
an e x c e l l e n t
position.
RATI NG OF PROPERTY
There
is
administrator
understand
of
rates,
an a d d i t i o n a l
should
various
be a c q u a i n t e d
situations
regulations,
involves
the
purposes
of
various
and
rate-making,
rate-making
organizations
excessive,
and
insurance
with
of
the
adjustment
bureaus
of
to
that
develop
of
of
It
rates
discriminate
that
losses.
for
f or ms,
is
school
he may
establishment
organized
claims.
the
in o r d e r
standardization
and a d j u s t m e n t
not
of
concerning
the
types
prevention,
but
area
the
that
the
l os s
purpose
are
fairly
This
of
adequate
among
risks.
Fire
regional
or
jurisdiction
Montana,
fire
Other
insurance
state
over
rating
bureaus
are
Pacific
Fire
basis.
The
Alaska,
Arizona,
carriers
c o mp a n i e s
doi ng
may s u b s c r i b e
^Allen,
I oc. c I t .
to
Rating
California,
and Or e g o n - - W? t h me mb e r s h i p s
insurance
organized
the
^lbid,,
in
these
bureau's
p.
14.
Bur e au
Ne v a d a ,
consisting
business
on a
of
has
Utah,
stock
states.
service.
^lbid.,
p.
15.
The
voluntary
various
National
Bur e a u o f
organization
of
kinds
of
casualty
organizations
is
to
establish
rates,
For
Busi ness
compr ehensi ve
gather
time,
pr emi um
losses
agreed
to
separately
tunately
the
information
through
one
t i me
Texas
is
National
felt
there
ratios
the
so t h e
experience
to
At
these
and
of
i
School
develop
the
l umped
developed
Boar d o f
public
of
jurisdictions
only.
expense
jurisdictions
functions
a need
are
National
a
write
Association
rating
are
is
forms.^
is
schools
from o t h e r
requested,
this
the
collect
rating
with
standardize
the
The
statistical
institutions
experience
g r o u p . At
insurance.
on p u b l i c
Underwriters
c o mp a n i e s w h i c h
program f o r
educational
l oss
writers
has
school
experience
all
to
many y e a r s
Officials
stock
compi l e
and
Casualty
data
t o g e t h e r , and
for
Fire
the
Boar d was
entire
Under­
on p u b l i c
to
to
present
institutions.
refused
a
school
Unfor­
separate
unable
to
t he
follow
plan.
the
only
state
wh e r e
public
school
rates
^9pau1 B. S a l mo n , F i r e I n s u r a n c e P r i n c i p l e s and
P r a c t i c e s i n Sc hool D I s t r l e t s E m p I d y i hg Na t i d h a I Ty A f f i l i ­
a t e d B u s i n e s s O f f i c i a l s , B u l l e t i n No . I 8, ( E v a n s t o n ;
'
A s s o c i a t i o n o f Sc hool B u s i n e s s O f f i c i a l s o f t h e U n i t e d
S t a t e s and C a n a d a , 1 9 5 8 ) , p. 3 9 .
48
are
arrived
at
on t h e
exclusively.^^
required
to
loss
school
private
higher
officials
insurance
Fire
me t h o d s :
(2)
or
commonl y
be c o v e r e d
groups
by
on p u b l i c
loss
of
and
causing
the
public
Texas
he has
schools
less
experience
is
seen
fit
separately.
desirable
schools
risk
of
to
pay a
t wo
basic
r a t e . ^^
ratings
used
rates,
the
schedule
variation
s c h ool
C o mmi s s i o n e r
feel
insurance
(I)
manual
classes
the
is
public
to e s t a b l i s h
experience
schools
of
Insurance
by s t a t u t e
collect
Many
The
basis
in
rating
rating
for
for
is
life
this
for
empl oy
c o mme r c i a l
buildings,
dwellings.Manual
t o whi ch
risk
s y s t e ms
a uniform
n ot
rate
considered
and a u t o m o b i l e
study,
since
they
rating
is
sets
applied,
measurable.
insurance
do n ot
and
up
since
It
is
and w i l l
involve
n ot
s c h ool
propert y .
The p r i n c i p a l
provide
an
insured
and
incentive
to
righted
for
l oss
recognize
f r o m one p r o p e r t y
The
objective
to
basic
^0 I b i d .
Dean
schedule
prevention
rating
on
differences
the
in
is
part
fire
to
of
the
hazards
another.
Dean A n a l y t i c
by A . F .
of
in
5'lbi.d.
Syst e ms
1902.
was d e v i s e d
The
^2Greene,
system
op .
is
cI t . ,
and
copy­
now owned by
p.
752.
the
We s t e r n A c t u a r i a l
basic
each
for
r a t e s , whi ch
of
the
this
police
ten
data
relating
affect
it
crease
the
classes:
and
They
to
spread
classed
the
fire
either
Fire -re s is tiv e
inspect
risk.
rate
as
fire
has
are
survey
that
started.
are
that
con­
affect
of
the
or
given
each
wh i c h
collects
hazards
into
originate
contribute
These
property
a building
separated
wh i c h
fire-res(stive
buildings
factors
features
hazards--those
it
classified,
street
and e v a l u a t e
hazards--those
once
for
facilities,
property,
In g e n e r a l ,
of
are
fighting
to
tables,
with
fires.
specific
probability
causative
of
fire
use a s t a n d a r d
as a f i r e
contributive
to
of
engineers
of
c i t i e s . C i t i e s
and o t h e r - g e n e r a l
containment
Trained
risks.
of
Dean s y s t e m s t a r t s
in a s e r i e s
accessibility
climate,
and
compi l ed
according
protection,
detection
for
are
classes
purpose,
struction,
B u r e a u . T h e
that
that
in­
t wo
combust i on,
to
buildings
t he
are
non-fire-resistive.^^
credits
for
v a r i o u s *5
• ^ R a l p h B. F i nc hum, F i r e I n s u r a n c e Economi cs Thr o u g h
P l a n t Ma n a g e me n t , ( W a s h i n g t o n , D . C . : U n i t e d S t a t e s De pa r t ' ment o f H e a l t h , E d u c a t i o n , and W e l f a r e , O f f i c e o f E d u c a t i o n ,
1 9 6 4 ) , p. 13.
^Greene,
55Ibid.,
o p.
p.
5 &F i n c h u m,
cit . ,
p.
767.
769.
o p.
cit.,
p,
15.
50
construction
features
feature
affects
total
that
floor
space o f
construction
to
its
fire
and
the
a
of
are
l ower
insurance
a building.
features
hazard
so pay
rate
is
wh i c h
Another
the
According
a building
discussed
rate.
height
to
can
and
F i nchum,
t he
contribute
b e l o w:
1. The t y p e o f c o n s t r u c t i o n r e f e r s t o t h e f r a m i n g
and w a l l s y s t e m ( s t e e l , r e i n f o r c e d c o n c r e t e , w o o d ) .
roof
2. He i gh t i n c l u d e s t he
house, or r oof deck.
3.
Ar e a
is
the
total
number o f
square
feet
stories,
basement ,
of
space.
floor
4 . E x t e r i o r w a l l s i n c l u d e numer ous d e t a i l s such as
kind of m a t e r i a l , s o l i d , p r o x i m i t y to o t h e r b u i l d i n g s ,
h e a v y , and t h e i r t h i c k n e s s .
5. Pa r a pet s ar e
h e i g h t , nearness to
analyzed
adjacent
as t o e x p o s e d r o o f h o u s e s ,
w a l l s , and o t h e r e x p o s u r e s .
6 . Wa I I m a t e r i a I s i n c l u d e t o t a l a r e a , e a s i l y damaged
m a t e r i a l s , and a r e a o f w a l l s by s p e c i f i c t y p e s o f
material.
7 . A d d i t i o n s must be d e s c r i b e d as t o t y p e o f c o n ­
s t r u c t i o n , h e i g h t , f l o o r a r e a , s e p a r a t e or c o n n e c t e d ,
and w h e t h e r t h e y a r e owned by someone e l s e .
8 . F o u n d a t ?ons a r e d e s c r i b e d
t hey a r e exposed or n o t .
as
to m a t e r i a l
and
if
9 . R o o f , as t o w h e t h e r i t i s f i r e p r o o f , i n s u l a t e d ,
s u r f a c i n g m a t e r i a l , and c l o s u r e o f r o o f j o i s t .
and
10. S k y l i g h t s as t o numb e r , t y p e
p r o t e c t i o n by s c r e e n o r mesh.
1 1.
Floors
are
recorded
by
of
glass
construction
12. F l o o r o p e n i ngs a r e i d e n t i f i e d
l o c a t i o n and k i n d o f e n c l o s u r e .
as
to
and f r a m e ,
type.
number
and
51
1 3. I n t e r i o r w a l l s o r p a r t i t i o n s a r e
type of m a t e r i a l , p l a s t e r e d or n o t , type
if f i re-resistive.
I 4 . F i r e p r o o f i ng o f i n t e r i o r
p l a s t e r e d ; i f s o , how t h i c k .
are
c l a s s e d by
o f d o o r s , and
supports
and
15. H o r i z o n t a l s u p p o r t s - i n c l u d i n g b e a ms ,
t r u s s e s , by t y p e o f m a t e r i a l and i f t h e y a r e
1 6.
heavily
Interior finish
used a r e a s .
17. C h i m n e y s ,
thickness.
18 .
through
if
must
any,
be c h e c k e d ,
are
classed
St ovepi p e s , i f an y, are
c e i l i n g s , p a r t i t i o n s or
rate.
Light
The
type
The
facturing
rates
the
Universal
chai r man
of
1902.59
This
but
rate
of
to
type
vary
for
also
especially
c h e c k e d wh e r e
floors.
(electric,
occupancy
g i r d e r s , and
fireproof.
and
they
pass
e l e c t r i c a l ) and
the b u i l d i n g s
kerosene)
affects
commercial,
in
the
insurance
industrial
and manu­
b u i l d i n g s . 58
Another
is
as
they
by m a t e r i a l
19. H e a t r e f e r s t o t y p e ( g a s , o i l ,
how i t i s s u p p l i e d t o v a r i o u s p a r t s o f
20.
if
system of
Mercantile
a commi t t ee
of
wh e r e
property.
5 7 |bid., p . 16.
property
for
Sy st e m d e v e l o p e d
the
Boar d o f
s y s t e m was d e s i g n e d
in j u r i s d i c t i o n s
school
rating
it
Since
to
by
F.
insurance
C . Mo o r e ,
Underwriters,
rate
is
e mpl oy e d
this
system
5 8 |b ;j ^ ^ p . 19.
fire
in
mercantile
risks,
it
used
?s a l s o
is not
59,
to
copyrighted,
p.
25.
52
it
can
be c ha nge d
zation,
with
The
"standard"
the
at
system s t a r t s
city.
and
utilizes
inspection
building
features
standard
Is
the
The
or
average
rate
for
giving
that
rate
of
rate
for
is
this
city
is
is
ftre
system
utilizes
rate
of
rate
a
wh i c h
i n ,a g i v e n
by ma k i ng
superior
and
same
system
the
is
one w i t h
the
and a key
building
or
in a
purpose
adequate
The
determined
inferior
official.
c o d e s . This
wh i c h
city,
organi­
building
essentially
a standard
city
for
S y s t e m.
a standard
a given
credits
Dean
a basic
in
building
considers
the
state
waterworks,
rigid
and
as
rates:
building
gravity
rating
a "standard"
A standard
protection,
of
with
proper
building.
streets,
types
the
any
building
wide,
level
of
of
A standard
brick
t wo
discretion
approval
an o r d i n a r y
police
the
city.
charges
features
of
valuation
of
city.^
PROPERTY VALUATI ON
Determining
buildings
officials.
and
their
accurately
and c o n t e n t s
A detailed
location,
construction,
is
list
of
contents,
and amount
60Ibid.
the
of
the
proper
responsibility
property
correct
insurance
of
including
valuation,
carried
61 I b i d .
the
s c h ool
buildings
type
must
be6
1
of
53
supplied
to
the
Since
tially
l ower
insurance
the
fire
on t h e
underwriter.
insurance
building,
rate
as
is
opposed
usually
to
the
substan­
contents,
ZO
it
is
important
that
property
Also,
certain
tion
purposes.
It
foundations
and
utility
since
they
as
from cov er age
i t e ms
all
The s c h o o l
valuations
in
He can
value.
In
clause,
he must
about
the
cost,
of
or
discussion
it
rather
difficult
t he
school
official
access
he needs
to
or
amount
that
p r o b l e ms
going
to
compe t ent
sound
requirements.^^
appears
is
three
to pur­
cost,
no a g r e e d
coinsurance
level
least
insurance
repl acement
such
fire.^
from a t
some
hav e
by
valua­
i t e ms
be l o w g r o u n d
of
a s s u mi n g
the
insurance
destroyed
amount
classified.
to exclude
may c ho os e
program p r o p e r l y ,
insurance
insurance
If
not
a value,
previous
for
connections
are
be a wa r e
presents
insurance
common p r a c t i c e
actual
selecting
administrators.
be e x c l u d e d
official
use
From t h e
the
is
determining
chase.
insurance
should
be c o r r e c t l y
for
fire
school
t o manage
know a good d e a l
advice
f r om an
e x p e r t . *6
3
^ 2 C l i f f o r d H. A l l e n , Sc hool I n s u r a n c e
(New Y o r k : The M a c M i l l a n C o . , 1 9 6 5 ) , pi 17 .
63Ibid. ,
p.
18.
66Ibid. ,
p,
24.
64Ib id .,
p.
19 .
Administration,
65Ibid.,
p.
22.
54
Several
States
i ng
ha v e
large
cities
and
attempted
to cut
fire
in
the
following
insurance
400,000
with
fourteen.
The
school
has
7,500
and
county
15 1 s c h o o l s
a capital
United
costs
the
by e m p l o y ­
maj or
IN SCHOOL SYSTEMS
Maryland,
students
s y s t e m owns
ones
are
has
in
type
a population
kindergarten
with
budget
property
has one
■
$13 m i l l i o n
valued
at
of
selfover
through
an o p e r a t i n g
of
of
grade
budget
per
of
year.
$146,000,000
and
empl oyees.
plan
the
school
their
contents.
c o mme r c i a l
as
has
Their
and
lishing
This
100,000
It
$60 m i l l i o n
ment
Count y,
pr ogr am.
of
the
section.
SELF- I NSURANCE
Mont gome r y
in
insurance
s e l f - i n s u r a n ce p r a c t i c e s . S o m e
discussed
and
counties
was d e s i g n e d
system a g a i n s t
This
insurance with
a cas h
follows:
reserve
loss
of
to
was
protect
fire
fund.
$500 or
l oss
accompl i shed
a $100,000
local
of
are
govern­
buildings
by p u r c h a s i n g
deductible
Pa y me nt s
I ess--no
the
and e s t a b ­
made f o r
payment ;
$500
l osses
to
f
$ 1 0 0 , 0 0 0 - - f uI I
pay me nt
less
$500;
over
$ I 0 0 , 0 0 0 - - f und
pays
^ H e n r y H. L i n n and S c h u y l e r C . J o y n e r , I n s u r a n c e
P r a c t i c e s i n Sc hool A d m i n i s t r a t i o n , (New Y o r k ; Ro na l d P r e s s ,
1 9 5 2 ) , p. 6 9 .
6R
Insurance
National Association of
Ma n a g e me n t , 5 0 t h Annua l
School B u s i n e s s O f f i c i a l s ,
P r o c e e d i n g s , 1 9 6 4 , p. 3 7 3 .
55
I
$ 9 9 , 5 0 0 — remai nder
over
The
$100,000
county
fire
The
has
losses
cash
from
the
The
feel
and
that
that
school
f und
c o mme r c i a l
hav e
costs
c o mme r c i a l
1914
could
lars.?^
bi d
in
The
and
fire
through
of
it
in
kept
1/ 2%
on hand
in
compa ni e s
whi ch
meet
the
county
officials
money on f i r e
s y s t e ms
of
five
insurance
could
reduce
year
the
coverage
their
fire
a pI a n .
school
system
Gener al
experience
70|bid.,
of
p.
st opped
purchasing
a self-insurance
at
now a p p r o a c h i n g
378.
an 8
earn­
those
is
p.
appro­
on
it
IbId.,
do s o . 7®
purchased
the
374.
to
pay
securities.?^
of
p.
to
accumul at ed
is
out
^ lb id .,
need
pays
cash
and e s t a b l i s h e d
l oss
carriers.^
Is
school
such
risks
up by an a n n u a l
f u n d was e s t a b l i s h e d
be p a i d
1931
and
Large
$500,000
had any
$500,000
from
The
for
built
insurance
Seattle
insurance
n ot
invested
school
the
c o mme r c i a l
amount
is
by u s i n g
No r e s e r v e
started
board
c ompa ny .
bond
has
been
saved
many o t h e r
to
reaches
remai nder
they
In
g r a m.
has
requirements.
Insurance
l oss
f und
by c o m p e t i t i v e
board's
with
it
An a p p r o p r i a t e
bank;
t e r ms
insurance
authority
as y e t ,
t he
When t h e
dividend.
the
but,
the
reinsured
the
reserve
priation
ings.
are
by
first,
Fund.
t he
but
A cash
I million
Seattle
375.
73Ibid.,
fire
f und was
dol­
s c h ool
71 I b i d .
p.
pro­
379.
dis-
56
trict
has
school
for
been v e r y
district
fire
ible.
nance
and
trained
tricts
fire,
the
of
could
state
the
have
attributes
the
l ow
A five
r e mi n d e d
officials
paid
feel
year
study
came back
fire
most
school
staff
that
to
the
only
dis­
plan
losses
17.22
school
is
h a z a r d s . 7^
large
fire
deduct
good m a l n t e
a self-insurance
of
revealed
to
custodial
that
The
$1,480,000
on $ 5 0 , 0 0 0
ratio
The
years.
paid
to prevent
by h a v i n g
Wa s h i n g t o n
pr emi ums
l oss
procedures.
s a v e money
of
wo u l d
they
fifty
same p e r i o d
school
losses.
in
the
constantly
These
$93,867
during
housekeeping
and
only
estimates
insurance
Seattle
l ow,
in
per
for
for
cent
pay me nt
for
cl a l m s . 75
The
city
Insurance
for
Insurance
or
s y s t e m has
average
the
a
$ I ,630,542
estimated
period
74
has
damage
self-insurance
loss
for
total
is
c o mme r c i a l
fire
of
the
in
No
a total
loss
of
insurance
76
or
year
fire
p.
380.
of
The
pr emi um f o r
per
to
period
l os s
$77,645.
$750,000
Ibid.,
s c hool
relation
a twenty-one
$16,500,000
75 I b i d .
when
favorable
suffered
annual
a plan
many y e a r s . The No
feasible
Duri ng
School s
been
followed
for
is
that
an a v e r a g e
hav e
Ibid.
ratio
p r e mi u ms .
Public
wo u l d
Chi cago
property
annual
Chi cago
of
this
year.
57
The
No
Insurance
$14,869,458
for
These
trative
of
their
of
resulted
ti me
financial
or
City,
reported
types
of
success.
p r o g r a ms
in
counties,
in a net
savings
of
p e r i o d . ^7
widely
how v a r i o u s
cities
New Y o r k
this
three,
self-insurance
large
plan
are
United
including
Philadelphia,
are
self-insurance
There
the
e x a mp l e s
about
operate,
fifty
States
such
illus­
other
operated
school
and
L
by
s y s t e ms
as
and C i n c i n n a t i . 7 ^
RELATED STUDI ES
Dupi ng
studies
relating
Association
continuous
cedures
of
a state
past
to
1921
to
Sc hool
1945.
Dr .
insurance
The A s s o c i a t i o n
77Ibid. ,
p.
of
years
fire
relating
sponsored
fire
forty
school
Public
studies
from
in Mi ch i ga n
of
the
there
insurance.
Busi ness
to
school
In
1959
plan
for
Sc hool
been
The
Officials
fire
their
Robinson's
hav e
study
that
National
conducted
insurance
state
of
several
pro­
affiliate
the
potential
s t a t e . 79
Bu s i n e s s
Officials
of
the
381 .
7 ^ S t e p h e n J . K n e z e v i c h , and John Guy F o w l k e s ,
B u s i n e s s Management o f L o c a l Sc hool S y s t e m s , (New Y o r k :
H a r p e r and B r o t h e r s , I 9 6 0 ) , pi 2 7 6 .
7 ^ Ge or ge R . R o b i n s o n , " S t a t e I n s u r a n c e o f P u b l i c
Sc hool P r o p e r t y i n M i c h i g a n " ( u n p u b l i s h e d D o c t o r ' s d i s s e r ­
t a t i o n , Wayne U n i v e r s i t y , 1 9 5 6 ) , p. 2 4 .
58
United
States
and
Sal mon
dealing
Canada
with
fire
sponsored
a national
study
insurance
principles
and
by Dr .
prac-
t i c e s . 8°
In
to
1953
determine
school
a bo v e
the
boards
In
Dr .
insurance
in
1956
Fi nc hum c o n d u c t e d
that
Dr .
Hi s
fire
insurance
Duri ng
1968
Dr .
and e v a l u a t e
and p r o c e d u r e s
compl et ed
study
state
analyze,
in Tennessee
of
state.
Ro b i n s o n
in Michigan.
existing
practices
a study
Had l e y
a state
dealt
with
program
carried
fire
the
study
ment i oned
an a l r e a d y
in his
state.
on a s t u d y
insurance
plan
82
to develop,
for
West
V i r g i n ! a . 83
All
insurance
three
plan
for
of
these
their
studies
respective
r ecommended
states.
To
a state
t he w r i t e r ' s
OA
Paul B. S a l mo n , F i r e I n s u r a n c e P r i n c i p l e s and
P r a c t i c e s i n Sc hool D i s t r i c t s E mp l o y i n g N a t i o n a l l y A f f i l ­
i a t e d B u s i n e s s O f f i c i a l s , B u l l e t i n No . 18", ( E v a n s t o n :
A s s o c i a t i o n o f Sc hool B u s i n e s s O f f i c i a l s o f t h e U n i t e d S t a t e s
and C a n a d a , 19 5 8 ) , p. 5 .
OI
Ra l ph B. F i nchum, "A S t u d y o f t h e I n s u r a n c e
P r a c t i c e s and P r o c e d u r e s o f T e n n e s s e e P u b l i c Sc hool Bo a r d s "
(unpubl i shed Do c t o r ' s d i s s e r t a t i o n , U n i v e r s i t y of Tennessee,
1 9 5 3 ) , P. I .
Q
0 R o b i n s o n , o p . c i t . , p. 9 3 .
B ^ H a r r y J . H a d l e y , "A S t u d y t o D e v e l o p , A n a l y z e , , and
E v a l u a t e S t a t e F i r e I n s u r a n c e P l a n f o r P u b l i c School Syst ems
i n West V i r g i n i a " ( u n p u b l i s h e d D o c t o r ' s d i s s e r t a t i o n , West
V i r g i n i a U n i v e r s i t y , 1 9 6 8 ) , p. 4.
59
k n o wl e d g e
states
concerned.
Michigan
action
such a p l a n
we r e
was
has
not
Apparently
submitted
to a
been
adopted
Robinson' s
legislative
Ho we v e r ,
for
in
the
ih
Chapter
United
84
findings
t he
for
committee,
b ut
no
taken. ^
,
p r o g r a ms
by any o f
there
coverage
States.
are
of
several
school
'
state
property
A summary o f
these
fire
insurance
now i n o p e r a t i o n
p r o g r a ms
appears
Th r e e .
A s s o c i a t i o n o f Sc hool Bu s i n e s s O f f i c i a l s o f t h e
U n i t e d S t a t e s and C a n a d a , R e p o r t o f I n s u r a n c e Management .
Resear ch' C o m m i t t e e , 45 t h Annua l P r o c e e d i n g s , 1 9 5 9 , p . 2 1 7 .
CHAPTER
CURRENT STATE FI RE
Self
the
United
insurance
States.
have e mp l o y e d
reason
sa v e
for
self
f r o m 20
costs,
plus
this
several
states
practice
50 p e r
earn
is
cent
interest
seven
not
Several
insurance
to
Table
is
INSURANCE PROGRAMS
new t o many s c h o o l
states
for
of
the
thifty-one
that
on f i r e
year
cities
The ma j o r
the
c o mme r c i a l
reserve
in
schools
can
insurance
funds.^
loss
ratios
for
period.
7*
Loss R a t i o s i n S e l e c t e d Syst ems
of C e r t a i n S t a t e s , 1921-1952
Loss R a t i o
S t a t e ____________ I 9 2 1 - - 19 30
Al aba ma
Florida
Michigan
Mont a na
N. C a r o l i n a
N. Da k o t a
Ve r mo n t
Wi sconsi n
claim
data
Table
Fire
many y e a r s .
the
sys t e ms
and a number o f
on t h e i r
presents
over.a
I I I
30.45
............
17. 71
63.59
15.05
------- ---------------
Loss R a t i o
1 9 3 1 - - 1937
16. 61
............
3.13
2.35
144.39 '
31.02
.00
.46
Loss R a t i o
1938--1945
Loss R a t i o
1 9 4 8 - - I 952
5.86
.72
5.86
.00
8.99
-------------.89
38.0
19.7
26.0
------33.3
-------12.5
26.3
- ' St e phe n Kn e z e v i c h , and John Guy F o w l k e s , B u s i n e s s
Management o f L o c a l School S y s t e m s , (New Y o r k : H a r p e r and
B r o t h e r s , I 9 6 0 ) , pi 2 8 8 .
I
Insurance
N a t i o n a l A s s o c i a t i o n o f Sc hool Bu s i n e s s O f f i c i a l s ,
Ma n a g e me n t , 5 0 t h An n u a l P r o c e e d i n g s , 1 9 6 4 , p. 2 8 4 .
61
In
those
appear
to
siders
these
cial
be
rates,
So ut h
are
first
in
as
State
the
Sout h
Division
and C o n t r o l
At
lishment
was
insurance
hi gh
self
for
pr emi ums
insurance
the
ratios
some y e a r s ,
but
if
as
about
in
fact
rather
state
self
insurance
one-half
l ow i n
most
one c o n ­
the
commer ­
cases.^
Carolina
lished
fire
using
relatively
they
The
the
states
Carolina
Insurance
of
1900.
Sinking
Sinking
Funds
This
Fund
and
and
program
is
is
known
administered
Property,
State
no p r o v i s i o n
for
by
Budget
Bo a r d .
the
of
outset
there
cash
reserve
any
and w i n d s t o r m
required
districts.
in
p r o g r a m was e s t a b ­
for
All
was
fund.
damage o n l y .
all
state,
other
public
including
institutions
included,
except
the
and p u b l i c
buildings
supported
State
The p r o g r a m c o v e r e d
Participation
county,
House.
estab­
by t h e
and
in
plan
s c h ool
their
state,
the
contents,
we r e
k
^ S t e p h e n J . K n e z e v i c h and John Guy F o w l k e s ,
B u s i n e s s Management o f L o c a l Sc hool S y s t e m s , (New Y o r k :
H a r p e r and B r o t h e r s , 19 ^ 0 ) , pi 2’8"61
op.
^National
c i t . , p. 3 8 5 .
Association
of
Sc hool
Busi ness
Officials,
^ Ge o r g e R. R o b i n s o n , " S t a t e I n s u r a n c e o f P u b l i c
Sc hool P r o p e r t y i n M i c h i g a n " ( u n p u b l i s h e d D o c t o r ' s d i s s e r ­
t a t i o n , Wayne U n i v e r s i t y , 1 9 5 6 ) , p. 2 6 .
62
In
coverage
1950
insurance
The
at
least
the
the
and
Division
once
fundi
l aw was
All
able.
insurable
less
to
and
settle
Funds.
any
state
of
Is
officials
The
pr emi um
The
cost
the
rate
cannot
When t h e
insurance
in
ment s . ^
The
l aw p r o v i d e s
out
Budget
available
of
at
the f i r s t
and
the
set
exceed
district
is
any
three
are
at
event
is
the
State
all
House. 5
agents
property
who
property
per
cent
is
are
by
by t h e
insur­
actual
di sagreement
appraisers
inspect,
handled
established
75-95
of
extended
cost
be t we e n
appointed
disputes.^
provided
the
of
the
include
t wo s p e c i a l
rated
value
In
circumstances.
cent
State
and a p p r a i s e
property
depreciation.
local
the
to
classifications
Division.
The
adding
provides
a year,
Property
amended
by
the
time,
available
the
f und
of
reaches
p.
445.
u nd e r
five
least
five
annual
pr emi ums
must
be p a i d
Boar d
local
funds.
on d e ma n d .
boa r d
must
The p e n a l t y
^lbid.,
p.443.
pe r
be c h a r g e d ,
If
pay­
to
no money
make payment
for
■’ S t a t e Budget and C o n t r o l Board' , E x c e r p t s
So ut h C a r o l i n a Code o f Laws R e l a t i n g t o I n s u r a n c e
B u i l d i rigs , D i v i s i o n o f Ge ne r a I S e r v i c e s , I 9 6 5 , pi
^lbid.,
Sinking
rate
no pr emi um w i l l
has made a t
that
Division
c o mme r c i a l
reserve
force,
Control
the
late
f r om 1962
of Public
1-431.
63
pay me nt
Is
five
There
ment
of
the
treasurer
the
U.
l oans
the
to
to
f und
school
to
f und
is
than
Sout h
early
until
present
no
limit
restrict
some
The
Notes,
.4
million
of
dollars
of
f unds
public
Sout h
ten
per
Carolina
feature
is
on e x p e n d i t u r e s
expenditures
whi c h
invested
in
real
estate,
and
insurance
in
and
force
expenses
of
Also,
dollars
on
amount ed
interest
program a l s o
provides
especially
important
is
from
from
for
state
i ncome,
cent.^
an a d e q u a t e
reinsurance
the
are
23 m i l l i o n
$788,601.80
invest­
Carolina.
O
on h a n d .
1966 a d m i n i s t r a t i v e
to
with
purposes
i n cash
about
regarding
deposited
specific
counties
compa r e d
This
At
and
and
In
insurance.
years
the
are
created.
800 m i l l i o n
less
The
for
now t o t a l s
property.
provisions
moni es
Bonds
about
$77,027.37,
wh i c h
All
state
keeps
per y e a r .
no s p e c i f i c
f u n d was
the
nearly
cent
be h e l d
Go v e r n me n t
The
has
are
fund.
sinking
S.
per
the
cash
reserve
still
the
In
The
re­
during
built
carried.^0
fund.
fund.
is
for
up.
There
Division
recent
years
O
Fur man E . M c E a c h e r n , J r . , R e p o r t o f t h e S t a t e
Budget and C o n t r o l B o a r d , ( S o u t h C a r o l i n a : D i v i s i o n o f
G e n e r a l S e r v i c e s , 1 9 6 6 ) , p. 10.
9Ibid.,
p.
1 1.
1 0 I b i d . , p.
25.
the
is
can
t he
64
annual
full
charge
for
business
pr emi ums
averaged
50
to
60 p e r
cent
of
rates.^
Wi scons ?n
Wi sconsi n
self
insurance
created
In
1911
t owns,
the
and
the
pr ogr am.
by s t a t e
and w i n d s t o r m
was
appraisal
1903.
protection
of
state
l aw was
amended
to
The
amount
the
replacement
state
Receipts
and
are
to
to
At
in
go up.
f und
invested
was
schools,
the
state
provides
board
The
are
the
to
fire
and
Commi s­
and
their
the
value
with
own
schools
property
actual
deposited
according
cities
by
insurable
of
only
fund.I %
encourage
cent
Fund was
inspection
as
a state
provided.
may e mpl oy
insurance
be 90 p e r
the
the o u t s e t
administered
local
their
Insurance
property
authorities
of
costs
considered
treasurer
is
services.
increase
is
f und
to e s t a b l i s h
Fire
allow
insure
who a l s o
The
erty
to
Insurance,
appraisers.
and
State
in
libraries
of
The
state
statute
The W i s c o n s i n
sioner
sec ond
to
values
of
cash
prop­
value.
th,e s t a t e
l aw by t h e
State
^ N a t i o n a l A s s o c i a t i o n o f School B u s i n e s s O f f i c i a l s ,
I n s u r a n c e Ma n a g e me n t , 5 0 t h An n u a l P r o c e e d i n g s , 1 9 6 4 , p. 3 8 5 .
IO
R o b e r t D. H a a s e , W i s c o n s i n I n s u r a n c e R e p o r t , 1 9 6 7 ,
p. 2 9 .
^Robinson,
op .
cit.,
p.
35.
65
I nvest ment
certified
the
Boar d.
to
the
same manner
expenses
consin
of
in
as
of
year,
continue
the
f und
the
July
I,
state
property.^
fifty
per
Bureau.^
several
serious
These
losses
c o mme r c i a l
The
and
all
for
t owns,
of
the
counties,
^Haase,
have
f und
at
the
been
coverage
All
in
of
i t . ^
when
the
Wi s­
t he
end o f
will
any
dis­
property.
in
of
are
made
collected
by t h e
years
f und
the
on
plan
Fire
are
Insurance
the
p r o g r a m,
and
moni es
wer e
bo r r o we d
been
repaid
with
interest.
to
charge
75 p e r
cent
of
t he
years.
coverage
Form on p r o p e r t y
districts,
and
insurance
t o wn s ,
c i t .,
is
that
on s t a t e
n ot
f und w r i t e s
and
fire
by
Insurance
early
occurred
carried
o p.
have
the
Property
cities
of
for
paid
provide
published
several
school
f und
2 04
rate
the
are
pr emi ums
rates
these
insurance
Institutional
1966
the
c a us e d
cities,
of
the
business.
$5,000,000
pr emi ums
losses
rate
f und
191*
of
and pay me nt
state
Co mmi s s i o n e r
Duri ng
state;
fire
Chapter
The
of
Rating
the
the
all
exceeds
1961,
cent
Finance
for
collection
Since
and e x p e n s e s
of
used
1961,
the
calendar
from
Bur e a u
operating
Laws
surplus
Losses
p.
230
29.
under
of
s c hool
^lbid.
Public
counties,
libraries.
on p r o p e r t y
the
At
in
the
end
forty
districts,
^lbid.
and
66
fourteen
library
b o a r d s . ^^
Pr emi ums
insurers.
The
for
Los s e s
l oss
ratio
of
for
expenses
amount ed
i nc o me .
Insurance
exceeded
one and
was
1966
totaled
state
all
to
property
periods
coverage
in
totaled
47.9
force
billion.
$71,316.81.
per
on a b o u t
at
from a l l
cent.
13.5
the
Total
per
cent
end o f
The b a l a n c e
of
t he y e a r
in
the
f und
$ 5 , 2 6 7 , 0 0 9 . 3 4 . 18
The e n d i n g
leading.
from
The
the
balance
State
f und
transferred
in
to
general
half
was
transferred
insurance
people
North
in
that
the
the
somewhat
made s e v e r a l
five
1959,
in
withdrawals
million
$1,700,000
19 6 3 ,
general
f und
mi s­
three
was
and o n e -
f u n d . ^8
should
not
was
The
be used
purposes.
Da k o t a
A State
Fire
and T o r n a d o
the
State
Legislature
the
third
state
ently
to
is
1955,
p u r c h a s e ; and
contend
non-insurance
In
fund;
l and
f und
has
years.
for
million
the
Legislature
recent
the
for
appropriated
for
was
$60,385.29
one-half
$488,61 2. 04
this
act
to
was
17Ib id .,
p.
of
adopt
North
a self
p r o mp t e d
30.
by
Fund was e s t a b l i s h e d
Dakot a
in
1919,
insurance
the
l 8 Ibid.
feeling
t hus
pr ogr am.
that
19Ibid.
by
bec omi ng
Appar­
private1
7
67
c o mp a n i e s
should
n ot
profit
at
the
expense o f
the
tax-
20
payers. ^
This
f und
started
H o we v e r ,
reinsured
the
has
fund
present
of
used
time.
mandat or y.
provisions
reinsurance,
The
Insurance.
the
to
five
requirement
Cover age
of
state
and
it
is
the
until
coverage
cent.
was
l aw r e q u i r e d
rates
In
in
the
degrees
by t h e
public
set
at
of
arises
about
of
was
can
fund.
l aw and
up t o
the
C o mmi s s i o n e r
property
23K. o.
( Bi smar k: North
p.
A.
In
1927
at
is
charge
ten
this
t he
per
cent
was c ha nge d
$2,000,000.
t i mes
over
t he
The
years;
OO
property
Insurance.
exceed
is
carried
Appraisals
c o mp a n y .
arbitration
n ot
to
reached
mor e
^0 F r a n k A l b e r s , S t a t e F i r e
N o r t h D a k o t a , 1 9 6 3 , p . Tl
2 l Ibid.,
f und
set
insured
appraisal
valuation,
dispute.C overage
f und
12 m i l l i o n .
Depar t ment
by a r e c o g n i z e d
it
several
all
ducted
the
the
carried.
1931
c ha nge d
Inspection
History,
varying
reserve
2I
per
through
in
included
administered
insurance
presently
wer e
is
c o mme r c i a l
of
no a p p r o p r i a t e d
f und
The o r i g i n a l
full
with
is
used
90 p e r
If
are
o ut
con­
a dispute
to
cent
and T o r n a d o
settle
of
the
full
Fund Law and
*2 2 I b i d .
N y g a a r d , S t a t e F i r e and T o r n a d o
Da k o t a P r o d u c t s , 19 6 7 ) , pi Tl
the
Fund,
68
insurable
value.
Pr emi ums
are
due on Augus t
number ed y e a r s .
A six
per
for
after
60 d a y s . ^
in
rates
late
pay me nt
fluctuated
widely
cial
rates
to
49.6
per
rate
exceed
no c h a r g e
cent
of
the
50 p e r
from
biennium
wer e
$317,291.64
day
plan
the
f und
seems
including
to
the
of
1966,
for
the
the
loss
was
^lbid.,
charge
t he
carried
Ne t
ev e n
the
assessed
f und
1966
has
commer ­
rate
was
rate.^
$343,126,292
pr emi ums
and
of
is
I n no c a s e may t h e
c o mme r c i a l
f und
odd-
from f u l l
The
for
total
27. 48%.
$ 6 , 3 3 2 , 12 3 . 3 7 . ^
c a p i to I
past
charged,
rate.
ratio
ha v e wo r k e d w e l l
state
In
$1,154,609.78
a
balance
year
i n s u r a n c e . ^5
policies.
totaled
per
it
c o mme r c i a l
1,109
1966
for
cent
On J une 3 0 ,
insurance
the
cent
I of
after
the
of
1964-
losses
paid
On t h e
same
Nort h
some
Dakota's
large
losses,
building.
p . 8.
^ G e o r g e R. R o b i n s o n , " S t a t e I n s u r a n c e o f P u b l i c
Sc hool P r o p e r t y i n M i c h i g a n " ( u n p u b l i s h e d D o c t o r ' s d i s s e r ­
t a t i o n , Wayne U n i v e r s i t y , 1 9 5 6 ) , p. 4 1 .
2 ^ H a r r y J . H a d l e y , "A S t u d y t o D e v e l o p ,
E v a l u a t e a S t a t e F i r e I nsurance Plan f o r P u b l i c
Syst ems i n West V i r g i n i a " ( u n p u b l i s h e d D o c t o r ' s
t a t i o n , West V i r g i n i a U n i v e r s i t y , 1 9 6 8 ) , p. 6 2 .
2^Albers,
op .
cit.,
p.
Analyze,
School
disser­
and
6.
2 ^K. 0 . N y g a a r d , B i e n n i a l R e p o r t o f t h e F i r e
T o r n a d o Fund o f t h e S t a t e o f N o r t h D a k o t a , ( B i s m a r k :
D a k o t a P r o d u c t s , 1 9 6 6 ) , pi SI
and.
Nor t h
69
Al aba ma
Al aba ma
The
l aw has
1955,
and
established
been
This
program cover s
Participation
The p r o g r a m a u t h o r i z e s
windstorm,
and
The
The
state
l oss
the
of
insured
The
is
Reports
are
and
f und, .
c o mme n s u r a t e
like
completely
every
service
filed
with
The
is
the
three
all
l os s
buildings
by
and
the
in
1923.
times,
in
1949,
is
state
voluntary.
by f i r e ,
their
lightning,
contents.
insurance
financial
of
Finance
company.
responsibility
appropriation
that
is
for
available
depleted.Inspections
are
year,
mor e
necessary.
ai med
at
owner s,
inspectors
are
frequently
i mpr ovi ng
the
De par t me nt
deputy
of
Fire
if
made
risk.
Education,
Ma r s h a l I s w i t h
a u t h o r i t y . ^^
insurance.
are
The
required
f und
of
all
officials
buildings
are
the
• S t a t e I nsurance Fund, S t a t e I nsurance
A n n o t a t e d , ( C h a r l o t t e s v i l l e : The M i c h i e
^lb id .,
p.
6.
^ Ibid.,
p.
covered
Depar t ment
29
Al a ba ma
p . 3.
of
De par t me nt
a c o mme r c i a l
any
Fund
types
schools
for
administered
a $100,000
Appraisals
State
all
accept
property
inspection
the
not
for
f und
is
by p u b l i c
insurance
for
somewhat
does
except
if
hail
f und
and o p e r a t e s
Insurance
amended and e x p a n d e d
1957.
property.
a State
4.
by
of
Fund o f
C o . , 1958) ,
70
Education
building
rates
and
values
used
spection
cent,
the
by
and
Buildings
if
the
the
so t h e
rate
the
f und
trophe
coyer
is
is
is
l oss
end
$7,526,669.80.
collections
39 m i l l i o n .
cent
of
of
in
of
of
of
Duri ng
nearly
i n c o me .
$1,344,328.19
Nort h
from
in
cent
of
item
of
its
the
f und
and
expenses
1966
losses
600
40 p e r
rates.^
The
re­
In a d d i t i o n
by p u r c h a s i n g
million
The
In­
discounted
i tem b a s i s .
four
on
catas­
dollars
to
on any one o c c u r r e n c e .
50 m i l l i o n
was o v e r
t hen
3 2
Al aba ma
i n A l a b a ma .
lifetime
Duri ng
by t h e
l osses
data
disagree.
c o mme r c i a l
by
$500,000
1966, .
are
used
amount
and p a i d
force
They
large
Administrative
annual
Insurance
per
on an
the
excess
the
established
is w i d e l y
protected
in
At
60
arranged
insurance
are
who c h e c k
and a p p r a i s e r
Bureau.
Reinsurance
insurance
owner
f und
Rating
Co mmi s s i one r ,
of
had
the
total
f und
paid
are
the
assets
of
has made t o t a l
losses
of
nearly
limited
to
six
f und
had an
per
i ncome
$1,225,060.34.
Total
.
.
34
million.
Carolina
The
established
North
by t h e
32 I b i d . ,
As s e mb l y
Carolina
p.
General
6.
State
Insurance
As s e mb l y
^^Ibid.,
p.
in
5.
p r o g r a m was
1949.^
^
The
Ibid.,
pr o g r a m 3
2
p.
S ^ N o r t h C a r o l i n a , S e n a t e B i l l No. 281 o f t h e
o f N o r t h C a r o l i n a , R a t i f i e d A p r i l 2 3 , 1949»
10.
Gene r a l '
p. I .
71
was
adopted
c o mme r c i a l
of
primarily
insurance
Education
missioner
for
be c a u s e
rates
objected
of
to
Insurance
of
in
a 25 p e r
that
the
state
increase;
wo u l d
not
in
North
Carolina
Insurance,
wh i c h
was
in
i ncrease’ in
19-49.
however,
rescind
or
The
the
adjust
Boar d
Com­
t he
rate
schools.^
The
Division
As s embl y.
wh e r e a s
program
of
Education
through
37
power s
.
This
other
property.
f und
state
is
created
to
the
operated
plans
administered
include
by
solely
liability
although
t wo m i l l i o n
dollars
was
l oaned
ary
to
r e p a id
in
Each
f und
establish
ciation)
wh i c h
building
the
service
p r o g r a m.
for
. This
l oan
Boar d o f
the
Ge n e r a l
schools,
types
for
by
by t h e
of
losses,
the
has
State
since
Liter­
been
fuI I .
The
ties
the
by
additional
no
start
the
Boar d
assumes
Fund
The
given
is
state
of
cent
not
insurable
are
is
policy.
they
does
value
checked
inspected
For
p.
by
the
and
2.
ha d .
appraisals.
(replacement
Division
rated
many s c h o o l s
hav e e v e r
36|bid.,
provide
this
Policies
Local
cost
of
the
before
first
p.
r e n e wa l
such
may be c a n c e l e d
37|bid.,
depre­
insurance.
each y e a r
is
l ess
authori­
for
I.
^ ^ N o r t h C a r o l i n a , R e p o r t on P u b l i c Sc hool i n s u r a n c e
F u n d , S t a t e Boar d o f E d u c a t i o n , D i v i s i o n o f I n s u r a n c e ,
( R a l e i g h : 1 9 6 6 ) , p. I .
72
deterioration
notice
is
or
d e l a p i d a t i on o f
required
to
give
the
buildings,
district
but
thirty
a chance
days'
t o make
OQ
repairs.
is
^
Reinsurance
purchased
loss
over
from
the
of
Duri ng
that
cl ai ms
totaling
to
Duri ng
paid
year
its
per
it
of
its
cent
of
the
school
the
The
pr ogr am,
year,
whi ch
to
i ncome o f
the
pay
f und
fire
i ncome and amount ed
has
for
this
a
earned
l oss
program
covers
total
losses.
and p a i d
costs
to
are
is
I i ru­
$65,525.77.
$7,673,590.29
ratio
it
limit.
had
$6 5 8 , 7 0 9 . 2 2
Administrative
f und
and
reinsurance
up t o a $ 4 , 0 0 0 , 0 0 0
17th
with
$5,132,264.21
in
in
London.
$778,434.76.
Participation
local
of
had an
existence
of
authorized
occasion
$3,493,557.98
ten
l oss
pe r
close
assets
tted
Lloyd's
$200,000
At
is
of
and
66.88%.^
optional
by t h e
district.
Mi c h i g a n
A state
legislature
property
fire
in Mi ch i ga n
only
and
^North
^ ^N o r t h
still
Carolina
if^ H a d l e y ,
p.
op .
in
1913.
This
functions
Senate
ci t . ,
Carolina
p r o g r a m was a d o p t e d
p.
State
op » c I t . ,
plan
on t h a t
Bill
No.
by t h e
included
basis
281,
0.
state
today.
c it. ,
4 2
p.
2.
69.
Boar d
2.
Ix0
4 ^RobI nson,
\
insurance
p.
61*
of
Education,
op.
cit . ,
73
The
program
University
insure
large
sophy
been
is
the
all
reserve
allowed
mandat or y
sy s t e m,
In
to
is
and
early
years
a cash
the
has
pay o n l y
s ma l l
only
$250,000
and
l oss
can
Insurance
Insurance.
of
the
is
bot h
In
fact,
and
At
He wo r k s
there
insured
by
the
fund.
The
purchase
insurance,
and
he has
done
to c a r r y
the
the
inspections
philo­
1955 has
f und
balance
Any
Legislature.^^
Director
of
C o mmi s s i o n e r
the
l a w,
and a p p r a i s a l s
Director
it
the
$50,000.
in
is
the
of
the
of
permitted
extensively
contents.
a
f und was
the
State
was
to
in
kF
^
States
At
we r e
is
by t h e
on b u i l d i n g
and
since
no p r o v i s i o n
property
Other
make
is
the
under
does
especially
plan
contents.
intent
present
of
and
the
the
19^5
maxi mum payment
by an a c t
except
Recently,
the
3
cost
in
$5,000,000.
can and
years,
buildings
r epl acement
Director
recent
property
operation
administered
Fund.
Although
state
its
losses.
be p a i d
The p r o g r a m
State
at
c ha nge d
to
larger
of
fund.
reserve
in Michigan
all
includes
buildings
in
for
the
t i me
of
utilizing
self
insurance
Ibid.,
p.
64.
this
investigation,
in
^ lb id .,
four
some f o r m . ^
p.
65.
other
T he s e
^ lb id .,
p,
states
states
64.
^ S t e p h e n J . K n e z e v i ch and John Guy F o w l k e s , B u s i n e s s
Management o f L o c a l School S y s t e m s , (New Y o r k : H a r p e r and
B r o t h e r s , I 9 6 0 ) , pi 285 .
'
74
we r e
are
Florida,
similar
property
Kentucky,
to
the
o n l y . ^7
one
a
one m a j o r
objective
insurance
and s a v e
and
the
and condemned
as
unsafe,
they
ha v e
their
all
self
that
is
to
taxpayers'
by
the
to
for
cost
They
state
insurance
and ha v e
have
of
have
socialistic.
be s u c c e s s f u l
pr ogr a ms
p r o g r a ms
the
money.
c o mme r c i a l
and
and
insurance
reduce
These
been
interests
Ho we v e r ,
accompl i shed
Attempt
Duri ng
state
a state
school
the
depression
g o v e r n me n t
new f i n a n c i n g
was
V e r mo n t .
obj e c t i v e .
Mont ana' s
the
the
monopolistic,
proved
and
in M i c h i g a n - - I i m i t e d
I I of
resisted
being
Or e g o n ,
having
arrangement s
insurance
buildings
and
plan
their
be a d m i n i s t e r e d
by
C o mmi s s i o n e r
of
Insurance.
policies
regulations
and
^Hadley,
Mo n t a n a
the
o p.
period
financial
wer e
for
state
property
This
such
several
innovation
including
p r o g r a m was
office
Co mmi s s i o n e r
and m a i n t a i n
p.
19 3 0 ' s , w i t h
attem p ted .O n e
Auditor's
The
the
difficulties,
contents. ^
State
ci t . ,
of
as
was
to
Ex-officio
to
records
set
as
he
69.
^ P r o f e s s o r E a r l F e l l baum,
S t a t e U n i v e r s i t y , Bozeman,
personal i n t e r v i e w s ,
I 968- I 969.
^ M o n t a n a , Sessi on Laws, T w e n t y - f o u r t h
A s s e m b l y , H e l e n a , 1 935 , Ch . 1 7 9 .
Legislative
75
determined
necessary
The
property
to
The
respective
we r e
purchase
rates
required
insurance
we r e
set
common I y
accepted
Boar d
E x a mi n e r s
of
insurance with
insurance
of
safe
be p a i d
the
into
pay
rates.
to
the
out
of
the
The
State
origin,
if
loss
design
and
pa s s e d
by
Fire
to
report
the
into
on
details
of
operation
some d i s a g r e e m e n t
50Ib id .,
or
p.
on a t h r e e
or
purchase
reinsure
company
for
cost
of
such
property
was
findings
to
exactly
day
of
Act.
the
of
wh a t
State
of
t he
principles
was
to
p.
investigate
fires
He was
involving
to
determine
carelessness
Commi ssi oner .
As s e mb l y
June,
as
Apparently,
in
381 .
5 2
this
or
As
Ac t
1935.
happened
unclear.
51Ibid.,
the
and
excess
the
to
all
due t o
misunderstanding
380.
that
reinsurance
assigned
Legislative
first
prevailing
fund.
was
the
moni es
term.
year
portion
c o mme n s u r a t e w i t h
insurance
are
the
such
of
treasury
stated
under
the
state
also
Twenty-fourth
became e f f e c t i v e
The
his
state
circumstances
insured
public
the
in charge
The Ac t
Mar shal
and
offices
p r o g r a m.
at
as was
state
insurance
C o mmi s s i o n e r
un d erw ritin g .T h e
property
put
to
a reliable
public
was
and
the
had
the
boards
from
by
liability
cause,
the
to op e r a t e
the
the
pl an
t h e r e was
Commi ssi oner ' s5
0
52Ibid. ,
p.
383.
76
office
about
how t h e
Eventually
reinsurance
insurance
Assurance
Company a t
a
after
insurance
was
the
collected,
Number
of
37
in
Mo n t a n a
sioner,
of
t he
compa ny.
No v e mb e r ,
caused
and
repeal
entire
the
Court
John J .
Ho l me s .
repealed
in
by a c t
of
$1.40
pe r
from Pear l
h u n d r e d . 53
and most
of
p r o g r a m was
repealed
by Re f e r e n d u m
1936.5^
This
for
action
t he
the
by
owi ng
from t he
the
refund
dispute
case of
The s t a t e
Pearl
was
Legislature
settled
Assurance
insurance
in
plan
people
Insurance
amount
of
pr emi ums
the
the
the
Ho we v e r ,
purchased
about
the
of
be h a n d l e d .
was d i s a g r e e m e n t
Eventually,
Supr eme
to
was p u r c h a s e d
some d i f f i c u l t y
there
and
rate
was
Commi s­
effective
by
date
insurance
t h e Mont a na
Company v s .
was o f f i c i a l l y
1939.^
*
5 3 Mo n t a n a S e n a t e , R e p o r t o f S p e c i a l I n v e s t i g a t i n g
C o mmi t t e e A p p o i n t e d u n d e r S e n a t e J o i n t R e s o l u t i o n Nd.' 7 t o
I n v e s t i g a t e S t a t e A u d i t o r ' s O f f i c e as t o t h e A d m i n i s t r a t i o n
o f t h e S t a t e I n s u r a n c e Ac t and t h e A d m i n i s t r a t i o n o f o t h e r
I n s u r a n c e M a t t e r s , H e l e n a , 1937» p. 9 .
^ M o n t a n a , Sessi on Laws, T w e n t y - s i x t h
A s s e m b l y , H e l e n a , 1939, C h . 165 , p. 396 .
55 I b i d .
Legislative
CHAPTER
CURRENT SCHOOL
The
Mo n t a n a
is
study
This
The
was
in
the
current
the
to
chapter
school
proposing
presents
conducted w i t h
schools'
reduce
INSURANCE PRACTI CES
imperative
Mont ana.
study
of
insurance
overall
IV
cost
insurance
any
the
a view
practices
in
type
of
plan
for
results
of
such
a study.
t o wa r d
practices
of
IN MONTANA
that,
insurance
proposing
changes
hopefully,
service
for
woul d
public
schools.
The d a t a
wh i c h
sent
was
to
A copy
was
mailed
in January
t wo h u n d r e d
of
the
collected
Ninety-seven
All
wer e
wh i c h
compl et ed
wer e
February
left
to
request.
or
schools.
wer e
fifty-six.
the
This
number
who u l t i m a t e l y
throughout
122 o f
compl et ed
mailing
responded
a third
for
The q u e s t i o n n a i r e
questionnaires
thirty-two
After
a questionnaire
on page
A sec ond
Mar ch
received
schools
partially
As a r e s u l t ,
remaining
1970.
appears
t h o s e who had n o t
Duri ng
lation
of
blank.
received.
returns
of
seventeen
instrument
by u s i n g
this
mailing
a grand
represents
responded
to
to
sent
the
was
for
of
per
two
out
replies
made
one
cent
in
first
to
twenty-seven
total
71
returned.
except
additional
request
Mont ana.
A p p e n d i x A.
wer e
was
was
we r e
t he
more
hundr e d
of
the
the q u e s t i o n n a i r e .
popu­
78
Telephone
calls
effort
increase
to
and
the
The w r i t e r
letters
to
from
many s c h o o l s
part
of
the
study,
the
the
of
this
for
fact
type.
that
its
the
purpose.
agents
of
the
and
Si nce
agents
to
fill
became a wa r e o f
opposed
may a c c o u n t ,
cent
calls
Mo n t a n a who seemed
insurance
some w e r e
This
29 p e r
and
local
questionnaire,
and a p p a r e n t l y
telephone
throughout
study
i n an
replies.
several
people
requested
the
project
the
received
about
messages we r e e mp l o y e d
number o f
insurance
be c o n c e r n e d
out
personal
to
in
a
research
part
population
at
least,
di d
not
the
survey
„
respond.
The
school
represented
public
total
or
approximately
school
number
29 p e r
property
of
cent.
Educational
districts
80 p e r
currently
questionnaires
Carter
Research,
Good,
f ound
who used
cent
response,
so a p p a r e n t l y
wer e
about
in
of
use
returned
his
value
of
in Mont a na .
book
was
returns
sixty-one,
students
average
for
t he
The
Essentials
doctoral
a questionnaire
the
the
to
of
at
a 71
this
Col um
per
st udy
average.
Some o f
not
in
responded
cent
n ot
that
b ia University
county
whi ch
basis,
the
data
although
coterminous
with
collected
the
county
school
will
be a n a l y z e d
district
boundaries
on a
boundaries
i n Mo n t a n a
are
except
79
for
a f ew c o u n t y
Since
school
at
the
operations
some
Public
is
high
length
in
study
to
relation
1968
other
Mo n t a n a
Rating
than
The y
tuarial
and
on f i r e
l osses
Table
Fire
8,
also
page
Rating
80,
table
the
c o mp a n i e s
and
Statistical
ratio
c o mp a n y ' s
(Helena:
the
State
of
be e x a mi n e d
Superintendent
Repor t
However,
school
connected
that
was
of
first
it
received
authorities.
Rating
bel ong
loss
is
for
to
Bur e au
fire
the
for
a summary o f
Great
insurance
National
Association,
ratios
of
coverage
Insurance
wh i c h
the
Falls,
compi l es
member
a report
in
Ac ­
data
c o mp a n i e s .
from
the
Mont a na
since
n ot
all
Bureau.
This
l oss
to
facets
they w i l l
information
rates
Statistical
and
insurance,
some
Fire
establishes
Montana.
several
Bur eau
The Mont a na
Mont ana,
upon
Biennial
consider
f rom sour c es
FIre
t ouched
regarding
Instruction
necessary
schools.
is
somewhat
reported
to
the
Association.
of
86.4
per
cost
of
doi ng
cent.
incomplete
National
The
Insurance
table
shows
When added
business,
^ H a r r i e t M i l l e r , Bi e'nn i a !
S u p e r i n t e n d e n t of P u b l i c
this
to
woul d
of
Actuarial
an o v e r a l l
an
insurance
produce
a net
R e p o r t , S t a t e o f Mo n t a n a ,
I n s t r u c t i o n , 1 9 6 8 ) , p. 3 9 .
80
loss.
Duri ng
school
fires
Mont a na
that
the
period
and a number
caused
covered
of
severe
extensive
Fire
Loss
Year
Ea r n e d
1959
I960
1961
1962
1963
1964
1965
1966
1967
I 968
$
Total
$3 , 0 9 4 , 6 1 6
Ratios
Pr emi ums
in
several
in
large
eastern
f r o m wi n d
and
hail.
8
Mont a na
Incurred
337,379
261,176
264,777
363,408
431,772
408,981
304,693
214,452
205,775
302,203
we r e
s t or ms
losses
Table
Sc hool
there
1959-1968
Losses
Loss
Ratio
94,355
16,577
97,855
401,942
107,657
100,761
187,208
661,438
997,909
7,093
28.0
6.5
37. 1
110.0
25.0
24.7
61.3
309.4
484.4
2.3
$2 , 6 7 2 , 7 7 5
86.4
$
SOCI AL UPHEAVAL
Duri ng
in
social
Young
unrest
people
on t h e
All
and
years
of
nation's
with
this
there
upheaval
and m i n o r i t y
dissatisfaction
me di a .
recent
the
militant
educational
been
throughout
groups
old
has
are
order
a noted
the
showi ng
United
is
pr ogr am and,
States.
increased
as w i t n e s s e d
activity
increase
having
by t h e
its
news
effect
consequently,
on
81
the
cost
of
Some o f
United
States
insurance
of
any
willing
the
deductibles
due
the
to
to
school
the
kind
are
9,
cost
l oss
of
fire
in
year
was
four
r e ma i n e d
1969,
p.
are
having
any
wer e
22
whi ch
years
al most
price.^
unless
the
to
shows
82,
the
a total
last
F a r West
at
page
with
Georgia
eastern
university
there
in
the
increased
1966
that
in
available
and
1966 w h i c h
schools
rewrite
data
Table
in
the
and
not
basis
Insurance.^
school
school
reported
a
the
rather
a total
34.5
are
securing
c ompa ni e s
doubled
and
substantial
losses
of
6,900
million
loss
dollars.
fires
In
or
more--
The most, c o s t l y
single
Ro bi n s
of
amount
s c h ool
Senior
$900,000.7
of
fire
Hi gh
School
Duri ng
losses
the
has
stable.
^The Wa l l
4 0 , co I .
Street
W.
Journal
[ New Y o r k j ,
December
3 " T h e We e k l y N e w s l e t t e r on E d u c a t i o n a l
Ed u c a t i on U . S . A . , December I , 1 9 6 9 , p . 79-
10,
Affairs,"
4 I bi d.
for
5 Lewy O l f s o n , "How Many o f Your S c h o o l s Ar e Ri p e
a F i r e , " Sc hool Ma n a g e me n t , X l l ( A p r i l , 1 9 6 8 ) , p. 7 9 .
6 Ibid.
are
On a n a t i o n a l
f i r e s - - $ 2 5 0 ,000
Wa r n e r
at
Insurance
$50,000.^
$9,363,400.^
burned
t he
fires.5
shows
the
of
difficulty
pr emi ums
some
taxpayer
large
part
Ibid.
8
2
Table
Cost
of
Sc hool
Fires,
Year
Number
1962
1963
1964
1965
I 966
3,200
4,500
5,200
7 , 100
6,900
a fire,"
tana
Total
Loss
$ 15 , 9 0 0 , 0 0 0
32,900,000
36,200,000
3 1,500,000
34,500,000
S c h o o l s Ar e Ri p e
1968) , p . 92.
Over
experience
not
fire
Insurance
the
past
been
losses
several
very
years
favorable.
i n Mo n t a n a
as
the
Table
for
i n Mon­
10 shows ma j o r
reported
by
the
State
Co mmi s s i one r .
Table
Major
Sc hool
Fires
10
i n Mont a na
Yea r
Location
1963
1964
1965
1966
196?
1968
Bou I d e r
Box E l d e r
Florence
G l e h d i ve
WoI f P o i n t
Har l em
Total
I 96 2- I 9 6 6
* Le wy 0 1 f s o n , "How Many o f Your
Sc hool Ma n a g e me n t , X l l ( A p r i l ,
has
school
3 *
1963-1968
Loss
$ 211,833
126,271
264,800
600,000
809,250
190,296
$2,202,450
83
When t h e s e
Table
the
8
it
is
single
lected
apparent
fire
by a l l
l osses
the
The Mont a na
on f i r e
losses
departments
state
departments
cause
of
this
year
State
Ho we v e r ,
filed
lack,
to
the
t wo y e a r s ,
far
insurance
required
ha v e
compar ed
ih
1966 and
exceeded
Marshall
By s t a t e
the
also
statute
t o make an a n n u a l
only
such
data
about
in
1 96 7,
revenue
col­
collects
data
the
the
report
local
to
t wo
thirds
of
in
recent
years.
reports
from
pr emi ums
c o mp a n i e s .
Fire
in Mont ana.
are
office.
that
i n eac h
of
are
state
office
is
fire
the
the
local
Be­
somewhat
i ncompI e t e . ^
BASI C
The q u e s t i o n n a i r e
however,
wer e
some q u e s t i o n s
over
one h u n d r e d
dents.
Table
11,
page
present
an o v e r v i e w
of
DATA
contained
contained
responses
84,
is
the
basic
twenty-eight
numer ous
required
included
data
at
parts,
from
the
this
received
questions;
so t h e r e
respon­
t i me
to
from t he
qu e s ti o n n a ir e .
cost
of
Mo n t a n a
From t h e
figures
reported
property
insurance
is
it
can be see n
slightly
in
excess
^Wi I I i a m A. P e n t t i l a , An nua l R e p o r t ,
S t a t e F i r e M a r s h a l l , 1 9 6 8 ) , p . 5.
that
of
the
one
(Helena:
84
per
cent
this
type
costs.
the
of
the
of
insurance
Several
effect
that
new ones w e r e
stantially,
are
when a l l
of
be
schools
in
budget.
is
questionnaires
as
the
old
insurance
the
rates
year
neighborhood
of
under
Total
Value
Total
Number o f
Total
Property
of
Buildings,
Buildings
Pe r
increased
most
of
probable
new r a t e s
dollars
to
and
sub­
t he
that
the
cost
for
the
school
presented
and
Budget s
Contents
Reported
$228,516,360.00
year.
most
1 2,
of
643
Pr emi ums
Pai d
1969-70
$701,384.85
$4,500.00
1969-70
paid
$156.00
in T a b l e
Since
11
District
Bu dge t s
The pr emi ums
1969-70
the
comment s
Buildings
Pr emi ums
l ow o f
and
Insurance
Operating
from a
seems
s c hool
expired
Since
of
reporting.
P r e mi u ms ,
Total
being
one m i l l i o n
Table
Average
it
cost
other
contracts
cent.
term
rewritten
than
the
contained
wer e
100 p e r
a three
t hem a r e
the
faster
the
some c a s e s
for
rising
Apparently
of
purchased
in
policies
will
operating
to
by
the
a high
$73,158,809.09
school
of
A summary o f
page
the
district
$56,000.00
the
r anged
for
pr emi ums
t he
paid
is
85.
school
s y s t e ms
i n Mont a na
are
85
rather
small,
dollars.
to
f ew o f
Table
11,
the
page
pr emi ums
paid
84,
shows
also
the
five
t housand
average
pr emi um
be $ 4 , 5 0 0 . 0 0 .
Table
Range o f
Insurance
Pr emi urns P a i d
$
exceed
00
5,000
10,000
15,000
20,000
25,000
30,000
40,000
-
12
Pr emi ums
Number
of
4,999
1969-70
School s
Per
73.3
16.3
5.0
0.0
99
22
7
0
5
9,999
14,999
19,999
24,999
29,999
39,999
59,999
Cent
3.8
.8
0.0
.8
I
0
2
RATES
Examination
overall
view of
geographic
three
population.
is
of
in
the
rates
except
Table
Co unt y A has
state
in
size,
t e r ms
paid
for
fire
for
the
s ma l l
all
insurance
13,
in Mont ana.
intermediate
Considering
some t y p i c a l
property
areas.
counties
of
the
of
page
insurance
county,
schools
is
s ma l l
are
on b u i l d i n g s
it
reporting,
is
is
about
The
constant
higher.
r an
B
largest
students.
rate
by
Count y
the
somewhat
the
of
arranged
C i s one o f
and
a good
larger
population,
population
wher e
for
a c ompa r i son
counties
and Co u n t y
bot h
provides
activities
86,
These
a very
counties
f r om a
86
high
of
value
.678
to
a
extended
to
a
rate
„168
coverage
for
.077
rates
ranged
one
hundred
per
dollars
true
hundred.
The
varied
malicious
from a
l ow o f
of
one
of
one h u n d r e d .
and
dollars.
from a
per
dollars
e ndor sement
vandalism
the
sand
one h u n d r e d
l ow o f
l ow o f
spread
per
l ow o f
The
.1096
to
rates
from a hi gh
A f ew s c h o o l s
mischief
. 011
rates
and a c t u a l
for
a high
blanket
of
Three
Selected
Co unt y
per
established
does
by
establish
contended
itself,
that
and
stated
a
and
.0299
per
we r e
one
thou­
I3
Counties
A
1969-70
Co u n t y
B
Number o f S t u d e n t s
. 5,050
287
Number o f T e a c h e r s
244
I I
Number o f B u i l d i n g s
2
39
$ 199, 285.00 $2 , 134,065.08
C u r r e n t Budget
6 8 2 , 276.00
8,542,701.00
Value of Buil dings
Value of Contents
I 39,860.00
872,409.00
F i r e I n s u r a n c e Rat e
.647
.497
Ext ended Cover age Rat e
.233
.077
5,000
28,624
P r e m i urns P a i d
of
.675
coverage
. 981
the
coverage.
Table
Most
of
separately
to a high
of
for
the
the
respondents
Mo n t a n a
rates
the
for
rates
Fire
school
we r e
some a p p a r e n t l y
stated
that
Rating
Bur eau.
property
set
did
by t h e
not
Count y
C
21,400
965
55
$13,737,843.81
27,356,716.00
1,544,316.00
.458
.269
87,965
the
rates
The
Bur eau
in Mont ana.
insurance
know how t h e i r
we r e
Some
company
rates
8
7
we r e
set.
In g e n e r a l ,
categories
for
the
the
smaller
rates
school
Table
Reported
Co u n t y
Beaver head
Bi g Hor n
Blaine
Broadwater
Ca r bon
Carter
Ca s c a d e
Ch o t e a u
Custer
Daniels
Dawson
De e r Lodge
Fa I I on
Fergus
Flathead
Mineral
Missoula
Mussel shel I
Park
Petroleum
Phillips
Po n d e r a
Powder R i v e r
Powe I I
Prairie
Ra val I I
Richland
Rooseve I t
TOTAL
$
Fire
tend
Losses
to
be h i g h e r
in
all
districts.
14
by C o u n t i e s
19 6 0 - 1969
Loss
Count y
O
O
244,084.00
0
0
750.00
18,546.59
0
0
0
600,867.31
0
101,251.40
0
I ,200.00
200.00
247.95
0
0
182.50
0
200.00
4,762.00
401.72
22,789.67
264,800.00
0
913,662.48
Ga I l a t i n
Garfield
Glacier
Gol den Va I l e y
G r a n i te
Hill
Jefferson
J u d i t h Ba s i n
Lake
Le wi s and C l a r k
Liberty
Lincoln
Ma d i s o n
McCone
■Me a g h e r
Rosebud
Sander s
Sheridan
S i l v e r Bow
Sti I !water
Sweet Gr ass
Teton
Toole
Treasure
Va I l e y
Whe a t l and
W i baux
Y e l l o w s t one
Loss
0
0
0
0
0
157,275.92
221,833.00
971.46
11,724.04
83.15
0
500.00
0
0
0
1,429.71
373.29
0
0
1,335.00
0
6,365.13
333.07
350.00
0
0
0
2,391.00
$ 2,548,910.39
88
The
to
school
amount
wi n d
of
and
vast
majority
ten
However,
l oss
theft,
due
to
of
losses
f rom
by c o u n t i e s
the
that
they
fuI I
ten
there
did
suffered
by
through
is
presented
is
n ot
n ot
prior
made
i 960
and
data
an e f f o r t
the
to
recoveries
most
of
a considerable
s t o r m s - - m o s 11y
mischief
Roosevelt
that
the
also
This
since
data
Ik,
last
c o mp i l e d
87.
a f ew s c h o o l s
that
on t h e
the
was
page
Appar­
stated
covered
the
had
dollars
destroyed
loss
or
figures
wer e
portion
of
endorsement,
Duri ng
the
in
REPORTED
be compa r e d w i t h
recoveries
coverage
Co u n t y
no
figures
during
available
collected
could
coverage.
one m i l l i o n
collect
in T a b l e
records
A substantial
extended
reported
by f i r e s
y ea rs .
so t h e y
coverage.
fire
was
schools
19 6 9 .
compl et e
hav e
The w r i t e r
the
caused
v a n d a l i s m and
I NSURANCE RECOVERI ES
Again,
we r e
hail.
years
ently
l osses
buildings.
T h e r e was
amount
of
the
ten
largest
total.
on
reported
from f i r e
the
vandalism
year
of
a new h i g h
school.
recoveries
for
t he
/
came f r o m
and m a l i c i o u s
period
this
losses.
insurance
recoveries
recovery,
Most
insurance
covered,
slightly
over
resulted
Several
entire
f r om a
counties
period.
89
Table
Reported
County
Amount
Recovered
Beaverhead
$
Big Horn
Blaine
Broadwater
621,457.83
0
55, 000.00
3,000.00
5,130.00
G a lla tin
G a rfie ld
18,803.55
0
0
G lacier
Golden V a l l e y
Granite
Hill
Jefferson
Judith
Basin
and
L ib erty
O
147.25
175,232.90
810.00
0
700.00
I I ,274.00
0
0
18,164.00
Carbon
Carter
Cascade
Choteau
Custer
Daniels
DaWson'
Deer Lodge
Fallon
Fergus
Flathead
Lake
Lew i s
Recove r ie s
Clark
,
Lincoln
Madison
TOTAL
0
0
127,463.97
0
I ,494.32
I 1, 723.04
3,083.15
0
20,500.00
0
by
15
C o u n ties
I 960 -1 9 6 9
County
Amount
Recovered
McCone
Meagher
M ineral
Missoula
Musselshel I
Park
Petroleum
Phi I l i p s
Pondera
Powder R iv e r
Powe I I
P ra irie
R avalli
Richland
R o o s e v e 11
Rosebud
Sa nd e rs
Sheridan
S ilv e r
Bo w
Sti I !water
Sweet
Grass
Teton
Toole
Treasure
Val ley
W h e a t I and
Wibaux
Yellows tone
$
0
0
200.00
3,641.72
0
0
542.50
0
150.00
4 , 762.00
0
2 2 , 794.67
0
0
1,001,612.48
7,409.42
373.29
0
0
2,335.00
0
5,465.14
233.07
350.00
0
2,000.00
0
2,169.16
$2,128,022.46
90
KI NDS OF POL I CI ES
Sc hool
under
The
several
blanket
school
and
districts
different
policy
policy
Un d e r
contents
carried
are
with
one
specifically.mentioned
school
districts
several
they
seven
Ten
ment i o ne d
Twenty-three
of
independent
risk
a separate
this
used
the
schools
specific
blanket
Peril
of
under
one
fifty-six
reporting
policies
that
Policies
and
Policies.
property
wh i c h
under
buildings
c o v e r a g e was
policy
reported
as
of
Institution
their
with
insured
type
building,
carried
all
districts
type
covered
policies.
one h u n d r e d
Multiple
Two s c h o o l s
buildings
of
Public
each
some p r o p e r t y
and
the
This
policies
t hen
property
popular
policy
This
insured
policies.
risk.
of
the
their
insurance
most
and
types
as a s e p a r a t e
with
Of
Standard
of
type
I I k of
the
appraisal
the
c o mp a n y .
by
insure
fire
appraised
specific
schools
of
t c be
reporting.
ment i oned
used.
types
appears
districts.
their
i n Mont a na
is
under
provides
then
carried
a combination
a blanket
independent
for
of
policy,
risks.
COVERAGE
All
least
of
straight
mischief
the
fire,
coverage
respondents
who
schools
reported
extended
on b u i l d i n g s
identified
the
that
coverage,
and
their
extended
they
carried
at
and m a l i c i o u s
contents.
coverage
Those
common I y
91
included
wind,
explosion,
mus i c a l
smoke,
length.
year
23 had one y e a r
one,
district
policies,
manent l y
in
p a y me nt s
civil
burglary,
out
year
years.
one
c o mmo t i o n ,
holdup,
to
by f a r
utilized
and
three,
five
year
a combination
having
unless
canceled.
equal
amount s
policies
paid
due each
their
reported
t wo and
124 s p r e a d
per
the
year.
total
reported
popular,
policy,
having
policies.
of
in
insurance
year
a continuous
reporting,
years
most
a five
One s c h o o l
and
five
the
term f o r
policies.
One d i s t r i c t
comi ng
this
schools
schools
into
was
reported
effect
the
three
three
and
f r o m one
policy
reported
and one
Of
with
of
r an
reporting
Thirty-six
combination
with
periods
three
59 d i s t r i c t s
large
riot
st eam b o i l e r ,
policy
The
policies.
and
aircraft,
instruments.
The
with
hail,
One
four
year
policy
per­
the
pr emi um
Three
school s
pr emi um once each
having
five
policies
year.
APPRAISALS
The
attem pting
companies
to
a rriv e
school
buildings
re lie d
on
p roperty.
th e ir
at
and
own
used
a
a
value
th e ir
of
v a rie ty
to
use
contents.
personnel
F o rty-n in e
wide
the
to
in
Many
appraise
d is tr ic t s
of
methods
insuring
of
the
the
in
the
schools
school
reporting
had
the
a
92.
appraisals
of
the
the
made
Boar d
of
buildings
Twenty-three
firm,
and
Finally,
Co unt y
the
Trustees.
used
nine
the
used
the
the
thirty-six
insurance
of
an
architects
to
value
districts
used
t h e members
s c h o o l s ' had
agents
involved.
independent
the
appraisal
buildings.
some c o m b i n a t i o n
administrator
appraiser.
or
Three
and an
of
insurance
districts
used
t he
Assessor.
Appraisals
wer e
intervals.
Forty-three
year,
forty-one
while
districts
had
eight
it
having
Another
by
school
an o u t s i d e
superintendent
services
twenty-four
or
school
appraised
peopIe - - e ither
agent
by
had
their
made most
schools
had
buildings
five
every
three
valued
years.
eighteen
at
one y e a r
an a p p r a i s a l
had one e v e r y
done e v e r y
appraisals
frequently
every
years.
every
Ni ne
t wo y e a r s ,
Two d i s t r i c t s
mont hs,
and
reported
and
t wo once e v e r y
the
buildings
ten y e a r s .
The v a l u a t i o n
presents
a somewhat
one o f
the
of
property.
the
inventory
and
to
schools
taken
principal.
value
the
of
the
different
took
Most
of
the
property,
to
One h u n d r e d
determine
the
twentyvalue
schools--ninety-six--had
personnel,
schools
of
picture.
inventory
by s c h o o l
Five
contents
reported
and a n o t h e r
usually
having
five
had
the
teachers
outside
the
the
firms
insurance
93
agent
this
take
type
the
of
Seventy-six
inventory.
property
of
the
teen
take
five
years,
only
once e v e r y
every
every
ten
schools
mor e f r e q u e n t l y
schools
inventory
three
Apparently
took
three
than
inventory
years,
t wo y e a r s ,
the
t wo
to
value
buildings.
every
four
and
tend
year.
take
take
it
Six­
every
inventory
years.
TYPE OF COMPANY
School
basic
types
reported
stock
of
a
of
d is tr ic t s
in
insurance
companies.
placing
insurance
th e ir
th e ir
insurance
companies.
property
Montana
with
both
both
of
E ig h ty -fiv e
coverage
Another
mutual
Com bination--U ti I izing
u t i l i z e
d is tr ic ts
e x c lu siv e ly
tw enty-three
companies,
stock
and
the
w hile
mutual
with
insured
nineteen
a ll
used
companies.
SELECTI ON OF. AGENTS AND COMPANIES
From t h e
determine
an a g e n t
to
deal
three
the
any,
of
exactly
or
coverage.
responses
wh a t
some s c h o o l
a company w i t h
Most
with
the
insurance
in
of
the
their
schools
at
established
his
by
received
whi ch
districts
the
Bo a r d .
place
select
to
letting
discretion,
is
difficult
districts
to
negotiations
reported
it
with
On l y
do
their
in
this
t he
selecting
insurance
an " a g e n t
buy
to
of
record"
insurance.
agent
Eighty-
distribute
constraints,
fifteen
of
the
if
districts
Sb
reported
using
Ov e r
they
if
kept
they
one
the
felt
Nineteen
any
kind
third
of
of
same a g e n t
the
for
schools
reported
that
they
wo u l d
to
school.
service
that
the
the
be c o n s i d e r e d
Seventeen
record
to
distribute
agents
in
the
local
the
no c o n t r o l
over
the
Best's.
had been
of
stated
time--
satisfactory.
Boar d e s t a b l i s h e d
agents
wo u l d
hav e t o meet
Is e l l insurance
to
required
insurance
c o mmu n i t y ,
period
qualified
schools
as
fifty-eight,
an e x t e n d e d
and
before
s y s t e m such
schools,
coverage
requirements
exercised
rating
the
eligibility
the
a
the
equitably
while
twelve
distribution
agent
of
among a l l
indicated
of
the
t hey
their
business.
The
ma na g e r
Boar d,
selected
the
the
superintendent,
insurance
reporting
districts.
The
mitted
thirty-five
of
one
it
in
smal l
was
school
a smal l
stated
isolated
Boar d
the
they
expressed
the
start
bids
year,
using
districts
kind
of
company
next
reported
criterion
that
wo u l d
that
to
c o mp a n i e s
s y s t e ms
called
opinion
1970.
the
Boar d
be used
service
in
the
the
in
requires
t own o n l y
Two s c h o o l s
or
business
fifteen
bids
to
reporting.
for
one
bids,
bi d
that
Onl y
was
they
but
school.
the
be s u b ­
since
received.
of
had e s t a b l i s h e d
selecting
t he
Ho we v e r ,
woul d
seven
of
probably
t he
any
insurance
95
RECORDS AND CO- I NSURANCE
The q u e s t i o n n a i r e
directed
local
at
determining
schools
Of
ninety-five
said
of
the
schools
districts
and
they
dred
all
of
policies
for
the
Of
ninety-seven
the
90
cent
n ot
per
of
the
coverage,
had
carried
one c a r r i e d
65 p e r
cent,
t wo d i s t r i c t s
coverage.
In bot h
to
their
they
clause,
Of
the
used
was
to
carried.
keep
Two
system a t
agent.
or
co-
Onl y . t hr ee
the
t wo s a i d
98 p e r
schools
Of
and
all,
One hun­
agent
checked
they
did
that
r e s po nde d
four
schools
not
Twelve
cent,
purchase
not
stated
using
carried
50 p e r
with
steel
no
they
di d
c o - insurance
of
t he
100 p e r
75 p e r
cent
use
100 pe r
cent
one c a r r i e d
buildings
t h e y wer e
eighty-five
t o 90 p e r
and one had o n l y
reported
these,
districts
equal
property.
cases
t he
section,
maintained
no r e c o r d
fifty-six
insurance
Insured
they
this
insurance
Onl y
Thirty-three
have c o - i n s u r a n c e .
extent
location.
c o - insurance.
coverage
system
concurrency.
one h u n d r e d
c o - insurance.
value
On l y
concurrency.
for
record
they
of
maintained
questions
completing
schools, r e por t e d
utilize
cent
twenty-four
one
register
policies
the
of
i n one
record-keeping
the
several
t o wh a t
record
on f i l e
they
the
and
only
a f or mal
left
type
100 d i s t r i c t s
the
stated
twelve
e x a mi n e
the
policies
kept
wha t
maintained,
insurance.
all
contained
cent
cent,
coverage.
insurance
buildings.
9
6
SCHOOL
The
local
to
boards
the
for
hundred
sixtee n ,
The
no
had
school's
b i l i t i e s
one
respondents
one
policy
personnel
acquiring
15
per
hundred
An a t t e m p t
with
of
the
insurance
a n s we r e d
this
excellent.
goo d,
it
was
poor.
at
all
for
ten
zed
in Table
recovery
pletion.
three
and
for
of
would
have
it
was
schools
l oss
from
of
In
been
study
These
to ta l
no
seven
included
in
the
school
Of
the
only
board
p o lic y.
trustees
t he
feelings
of
their
the
had
had
fair,
and o n l y
to
no
experience
wh i c h
been
had been
t wo
loss
indicated
experience
19 6 9 .
i n Mont a na
summary
per
had
and
districts
experience
shows
are
At
t he
been.received
from
*
:
De e r
these
population.
s u mma r i ­
a total
cent.
were.Custer,
schools
the
of
experience
83.5
counties
question
their
replies
responsi­
coverage.
type
recoveries
ten year s
th e ir
assistance
th e ir
regarding
i 9 60
the
of
any
reported
This
if
program.
their
page 9 7 .
counties.
McCone.
*
said
16,
this
this
Forty-seven
years
The o v e r a l l
but
assess
indicated
Fourteen
the
said
to
be
insurance
districts
said
would
answered
was made
indicate
carrying
six
problems.
nine
that
insurance
school
to
indicated
and
question
another
asked
in
who
the
Eighteen
POLICIES
adequate
cent,
governing
attitudes
were
p o lic ie s
twenty-two
or
other
any
BOARD
l oss
com­
f r om
Lodge,
counties
97
Table
Summary o f
Total
Los s e s
Total
Recoveries
Loss
Recoveries
for
the
coverage,
considering
we r e
83. 5%
asked
If
maxi mum p r o t e c t i o n
the
s chool s, who a n s we r e d
this
fourteen
did
school
$2,128,022.46
10 Y e a r s
districts
the
stated
they
Several
people
cost
not,
of
and
they
really
they
from
felt
their
the
question
replied
wer e
19 6 0 - 6 9
$2,5^8,910.39
Reported
receiving
certain.
In Mont ana,
Reported
Recover y
The
Loss
16
they
insurance
insurance.
seventy-seven
thirty-nine
didn't
qualified
wer e
think
Of
said
wer e
any o f
t o make such
t he
yes,
un­
their
a
judgment.
Space was
for
additional
c o mme n t s .
wer e
were:
provided
c o mme n t s .
Ho we v e r ,
repeated
(I)
school
insurance,
subject,
(2)
be u s e d ,
since
available,
some
the
( 3)
in
the
of
feel
uniform
the
the
schools
a need
several
for
such
comment s
common
r e ma r k s
instruction
know much a b o u t
recording
requested
insurance
questionnaire
included
The mor e
many do n ot
some c a s e s
of
end o f
who d i d ,
schools.
since
cost
44
ones
people
type
the
On l y
by s e v e r a l
the
regarding
of
at
had
system
data
was
increased
the
shoul d
not
f r o m 35
98
to
as much as
200
per
cent,
management
in
buildings,
and c u r r e n t
little
state
or
no f i r e
should
hav e
insurance
is
confusion
and
such
is
as
too
riot
spread
inventories,
own
over
so t h e
insurance
for
better
current
(5)
rural
rates
for
are
( S)
some t y p e s
of
districts
ha v e
high,
the
theft,
are
being
dropped
conclusions
and
recommendations
( 6)
( 7)
whi ch
of
risk
valuation
schools,
t o o many c o m p a n i e s ,
duplication,
and
need
inspections,
protection
its
the
t he
causes
insurance,
since
t he
cost
high.
The
be
t h e way o f
( 4)
included
commercial
insurance
in
Chapter
insurance
program
is
Six;
but
as
coverage,
the
presented
in
one
w i l l ,
a lte r n a tiv e
o u tlin e
Chapter
of
a
Five.
of
course,
to
public
CHAPTER
A
PLAN
F OR
V
MONTANA
Backg round
When
changes
ma y
at
a ris e
proposal
of
the
only
anyone
the
not
economy
approach
education
rap id ly
that
in
might
w idely
between
the
operate
determined
operation
the
large
population
the
some
so
of
points
from
in
states
of
sector
of
proposal
responsible
for
s ta te .
g eo g rap h ically,
is
long
fo r
with
distances
s e lfnumber
law
of
large
numbers
p ro b a b ility
of
losses
is
presented
the
an
the
public
lig h t
one
is
adequate
can
of
be
c e rta in ty .
proposal
includes
those
is
requirements
fo llo w in g
plan
This
it
by
in
th e re fo re ,
there
that
faced
this
state
allow
the
degree
the
This
to
those
of
and,
basic
Also,
involved
by
controversy
p riv a te
However,
a ffa ir s
a
any
it
le g is la tiv e
a ttitu d e s .
conclusive
costs
consideration
Is
and
on
and
some
problems
educational
e ff e c tiv e ly
the
a ttack
evidence
of
present.
with
an
Montana.
schools,
c o n s id eratio n .
major
the
b e lie fs
s ta te
T h e re fo re ,
the
is
as
educational
(schools)
government,
d iffe re n t
Montana
are
of
to
warrant
most
a d m in is tra tiv e
solutio n
dispersed
insurance
to
nor
the
level
intended
or
Since
risks
of
a c c e le ra tin g
conducting
a
state
because
is
suggests
state
what
plans
Alabama,
the
w r ite r
which
North
and
are
for
considers
now
South
in
Carolina
North
Dakota,
given
to
Hadley
and
in
West
adopted
be
the
W isconsin.
recommendation
th e ir
studies
V ir g in ia .
by
L e g is la tiv e
in
legal
by
terms
s ettin g
the
program
as
program
shall
State
out
basic
would
and
the
be
a u th o rity
o u tlin e
by
of
the
and
by
Public
the
the
to
be
have
to
state
q u a lific a tio n s ,
p re fe rab ly
in
depth
a d m in is tra tio n ,
and
his
school
to
carry
o ff ic e .
be
in
Montana
that
desire
that
p a r tic ip a te
personnel
do
not
unless
wish
to
carry
do
such
so.
The
of
insurance
functions
fo r
and
Small
a
considers
and
f i r e
such
D ivision
in
he
mandatory
property.
presently
they
as
to
appropriate
background
re s p o n s ib ilitie s
th e ir
for
D ivision
The
with
le g is ­
program
necessary
D irecto r
must
for
the
Insurance
program
insurance
schools
the
of
d e s c rip tio n .
The
d is tr ic t s
coverage
out
other
enabling
In s tru c tio n .
a
such
scope
fo llo w in g
of
necessary
shall
of
pass
ess en tials
adm inistered
Department
shall
consist
not
were
necessity
by
and
Michigan,
program
of
approved
L eg is la tu re
suggested
Insurance
room
a
been
Robinson,
Tennessee,
such
has
Assembly.
include
of
Finchum,
in
if
proposal
consideration
Requirements
la tio n
of
made
conducted
the
The^Montana
the
Also,
Obviously,
Montana,
re w ritte n
Basic
and
a ll
public
extended
one
and
two
insurance
The
program
need
101
shall
n ot
those
specifically
limits
be
the
secondary
shall
include
with,
or
hail
state
of
The
a director
office
of
He s h a l l
i mp l e me n t
As sembl y.
insurance
and d i s t i n c t
public
their
coverage
elementary
contents.
for
fire,
program s h a l l
any o t h e r
the
not
legislative
programs,
such as
entity
and
The
coverage
lightning,
be
involved
provision
for
those
crop
for
in
the
the
people
of
carry
shall
field.
Insurance
authority
out
ha v e
Hi s
the
a high
salary
available,
be
of
is
Public
t he
necessary
the
c o mp e t e n c y
in excess
from t he
residency
to
p r o g r a m.
in
be c o mme n s u r a t e w i t h
perhaps
recruited
and Mo n t a n a
of
of
of
in
Instruction.
considered
degree
shall
be v e s t e d
as a p a r t
requirements
and e x p e r i e n c e ,
He s h o u l d
cons!deration.
of
program s h a l l
Superintendent
ha v e w h a t e v e r
and
this
Division
State
qualifications
year.
Pr og r a m
management
Director
insurance
per
and
t he
i nsurance.
Management
The
Insuring
except
program w i t h i n
be a s e p a r a t e
This
to,
the
to pr ope r t y
Legislative
standard
hail.
subject
separate
of
l osses
in
buildings,
the
and
the
shall
purpose
school
windstorm,
by
program
sole
for
included
established
The
for
responsible
of
the
his
$20,000
best-qualified
should
not
be a
102
Starting
the
Pr og r a m
This
therefore,
given
and
of
it
a year
He s h o u l d
tive
p r o g r a m must
is
to
prepare
a functional
The
Legislature
for
the
shall
Division's
to enable
the
k n o wl e d g e
can
be o f
as
are
the
all
assistance
shall
to
officials
as
submitted
for
also
to
the
confirmation
be
reviewed
practices
by t h e
the
located
in
of
procedures,
necessary
to
ultimate
State
assure
plans
approval.
for
legal
Fire
The
for
provide
Montana,
experience
Go v e r n me n t
who
insurance
shall
establish
and
and o r g a n i z a t i o n
of
Superintendent
and
State
Director
the
allow
period.
Helena,
advantage
staffing
e mpl oy me nt
to
planning
school
structures
p r o g r a m.
period.
f unds
the
policies,
The
planning
in o p e r a t i n g
such
pr ogr am.
the
and
administra­
begin
State
i mp l e me n t
the
to
the
the
the
those
In
Upon a p p o i n t m e n t
of
of
adequate
during
be
be e mpl oy e d
pr ogr am shoul d
end o f
take
pr ogr am.
are
the
coordinated;
qualifications,
necessary
appropriate
Division
of
of
operation
Division
and
e mp l o y e e
at
Director
practicable,
to
Organization
division
t he
and
implementation
soon as
services
staff.
The
as
that
for
pertaining
supporting
his
suggested
develop,
details
be we I ! - p l a n n e d
effective
operation
operations
of
Public
functional
shall
be
Instruction
plan
should
compl i ance
and
sound
insurance
Marshall,
the
State
Co mmi s s i o n e r
103
of
Insurance
should
days
be
the
of
the
end
the
second
come
from
the
at
L e g is la tu re
shall
provided
the
an
from
the
the
by
by
public
the
a u th o rity
fund
to
issued
bonds
for
to
the
the
revenue.
year
planning
fin a l
at
program
least
30
period.
the
fund
is
invest
so
rate.
should
fund,
with'
a u th o rity
a
a
This
premium
excess
funds.,
to
D ivision
must
have
losses
in te re s t
rate
for
reasonable
time
period.
fund
generated
to
shall
bonds
generate
be
used
the
may
AAA
D ire cto r
by
from
deplete
The
the
by
guaranteed
le v e l.
the
or
borrow
be
accumulated
be
arranged
must
if
the
to
bonds
bonds
safe
the
funds
be
w ill
inter-governm ental
with
Such
begin­
from
Also,
in
agencies
current
in
co llected
funds
the
c a p ita liz a tio n
$3,000,000
the
at
$750, 000.
general
ad d itio n a l
sale
Income
for
th e'Insu rance
then
to
o rig in a l
nearly.
bonds.
below
operational
commercial
These
state
issue
the
a u th o rity
provide
and
insure
As
The
implementation
premiums
generate
program
tem p o rarily
The
current
issuing
s ta te ,
one
year's
from
other
empowering
for
become
year.
s ta te .
a p p ro p riatio n
loans
the
shall
then
should
by
of
f i r s t
the
c o lle c tio n
ready
A uditor.
Program
program
of
L e g is la tiv e
and
The
ning
schools
the
reviewed
before
Funding
and
the
be
corporate
shall
have
add itio n al
to
pay
the
104
operating
it
shall
expense
of
the
Division;
be added
to
the
accumul at ed
shall
follow
the
statutory
f unds
except
that
he may
accumul ated
Stock
f unds
Exchange.
to mai ntain
its
in
invest
practice
mone t a r y
any
value
surplus
funds.
requirements
corporate
This
if
The
for
r e ma i n s
Director
investing
up t o
50 p e r
cent
stocks
listed
on t h e
is
essential
during
If
periods
of
the
trust
t he
New Yo
f und
of
rising
by t h e
state,
is
prices.
All
losses,
f unds
f unds
and a l l
as
excess
bonds
be c o l l e c t e d
that
t i me
original
siders
shall
moni e s
will
any
o r i g i n a l Iy
be
repaid
f rom t he
become a v a i I a b l e i
until
excess
appropriated
the
f unds
f und
will
reaches
be used
insurance
Regular
pr emi ums
$10,000,000.
to
all
repay
At
t he
or
subsequent i ndebt edne ss.
I f t he D i r e c t o r cont
n e c e s s a r y f o r sound i n s u r a n c e p r a c t i c e he may l e t
it
the
f und
accumulate
in
force,
wh i c h
to
wo u l d
equal
five
per
be a p p r o x i m a t e l y
cent
of
the
$15,000,000
insurance
at
t he
p resent ' time.
Accounting
for
The
fiduciary
of
the
State
the
Funds
Director
accounting
funds.
shall
procedures
He s h a l l
Superintendent
follow
of
generally
accepted
in mai nt a i ni ng
s ubmi t
a mont hl y
Public
Instruction
his
statement
s h o wi n g
records
to
t he
receipts
105
and
disbursements
and
including
shall
tion
submit
to
the
should
include
d eta ile d
report
of
include
a
a ll
monetary
w ill
as
may
the
of
dependent
paid
to,
shall
at
D ire cto r
in
The
Insurance
Public
the
of
fund's
to
date,
the
D ire cto r
fin a n c ia l
p o si­
In s tru c tio n .
This
l i a b i l i t i e s .
Also,
of
shall
the
he
fund's
investments
by
s ta te 's
submit
income
the
be
and
State
the
an
operation
expected
expendi -
Superintendent
Travel
for
and
state
audited
A ccountant.
State
records
and
make
shall
be
of
funds
the
of
by
coverage
in
this
The
an
his
State
fo r,
of
and
d iv is io n ,
of
Montana.
program
shall
be
be
He
disbursements
D ivision
in ­
shall
Coverage
Insurance
costs
Treasurer.
responsible
a c t iv i t i e s
statu tes
the
diem
of
employees.
The
the
of
per
annually
o f,
D ire cto r
fin a n c ia l
the
the
e ffe c t
custody
D ire cto r
with
to
shall
adequate
other
accordance
in
D ivision
d ire c tio n
a ll
Y early,
required
a p p ro v al.
c u rre n tly
the
and
year,
for
C e rtifie d
surance.
vise
coming
m aintain
the
year
•
those
records
and
be
a n tic ip a te d
In s tru c tio n
be
Public
schedule
x.
Public
the
the
o f f i c i a l s .
the
a ll
of
assets
d e ta ile d
reports
showing
for
for
pending.
A nnually,
tures
and
claims
other
responsible
budget,
month
Superintendent
should
such
the
insurance
a
report
and
fo r
only
In­
super­
in
106
ma n d a t o r y
ance.
for
The
smal l
participate
may
reject
the
for
if
refuse
their
all
This
and
for
contracts
the
same
the
reduce
shall
property
be c a r r y i n g
The
reinsurance
if
and
issued
shall
the
shall
to
the
insured
the
pr emi um
local
for
of
available
the
insured.
Essentially,
full
a c o - insurance
provision
Director
hav e
f r o m c o mme r c i a l
the
that
to
t he
of
for
may be
buildings
risk.
State
and v a l u e
p r o g r a m.
to
be c h a r g e d .
shall
insured
to
He
determining
contain
by t h e
each
districts
10 p e r
fund.
local
r epl acement
authority
insurance
the
the
rates
property
cent
reasons
location,
districts
be 90 p e r
the
coverage.
under
basis
Director
condition
aba ndone d
annually
n ot
t hey
become an undue
description,
coverage
shall
action
on o l d
be t h e
the
physical
state
insur­
need
opinion,
insurance
they
report
contents
of
for
o r when
Also,
his
t he
by
buildings
he must
coverage
description
The amount
school
in
to
cases
establishing
legal
if,
due
property
listing
All
risks
Education
official
risks
the
covered
so e l e c t s .
recommend c o r r e c t i v e
or
buildings
board
such
property
room s c h o o l
properties
Director
of
t wo
local
contents,
Depar t ment
school
and
In
and
to q u a l i f y
The
of
the
buildings.
may a l s o
and
one
uninsurable
rejection
taken
public
specific
constitute
of
all
cost
will
of
then
cent.
to
c o mp a n i e s
purchase
licensed
to
107
conduct
business
shall
be
in
case
no
whose
in
to
only
fo r
this
type
and
tra c ts
the
of
a ll
to
than
items
commercial
services
of
the
the
of
of
in
be
a
The
fo r
the
Montana
ratin g
in
in
cover
of
of
provide
as
a ll
public
school
program
shall
be
its
actual
replacement
be
in
by
p arty .
Each
appraised
the
agree
s e ttle d
on
an
ta ile d
lis t
report
shall
the
the
report
con­
bidder
as
the
th e ir
and
the
Property
of
cannot
one
for
i t s e l f .
value
increases
or
adjustm ents,
The
shall
in
company,
well
be
requests
awarding
loss
may
d is t r i c t
d e ta il
the
but
properties
the
selectin g
regarding
can
p ra c tic e s ,
reinsurance
All
bids
In
purchased
p a r tic u la r
lis te d
companies.
company
bid
pro tectio n
p ro p erty.
call
consider
in
insurance
$1,000,000.
shall
shall
reinsurance
sound
property
coverage
should
with
Any
commercial
the
D ire cto r
V aluation
ings
less
performance
amount
the
is
the
s p e c ific
D ire c to r
past
shall
cover
the
Montana.
compliance
value
used
in
ann u ally,
p rice "level.
the
value
independent
d i s t r i c t
of
a ll
the
When
a
the
protected
cost.
allowance
All
made
ap p ro p riate
b u ild in g ,
app raiser
shall
school
include
of
and
property
the
retained
the
furnish
to
the
D ire cto r
buildings
in
the
d i s t r i c t .
value,
<
lo catio n ,
and
b u ild ­
for
the
o f f ic ia ls
dispute
by
by
shall
be
disputing
a
de­
The
d escrip tion
108
of
the
building
The
shall
The
value
value
shall
of
be
purchase
same manner
over
the
as
to
amount
of
appraiser
ation
and
the
l oss
by
the
shall
cost
for
buildings
annually.
determined
shall
settling
the
taken
usually
disputes
underwritten
from
be s e t t l e d
in
di sagreements
of
school
sustained
by
the
be b i n d i n g
C l a i ms
loss
are
to
to
bot h
losses
Director.
to
Disputes
party.
program
by
be p a i d
be s e t t l e d
disputing
on bot h
the
for
by t h e
s y s t e m.
are
by
conducted
Division.
reinsurance
e mp l o y e d
of
inventory
by a p p r a i s a l s
local
contents
buildings.
certification
covered
to
Any
property
district
n ot
by a d e t a i l e d
of
local
losses
insurable
prescribed
be d e t e r m i n e d
upon
the
prices.
shall
be p a i d
contents.
r epl acement
valuation
Losses
and
its
be d e t e r m i n e d
current
the
and
the
t he
can o n l y
All
Division
covering
by an
Hi s
t he
independent
determin­
parties.
Pr emi um Payment s
The
determine
the
coverage.
make such
stances
rates
Director
of
Division
pr emi um r a t e s
He s h a l l
review
adjustments
prevailing
shall
the
at
be c h a r g e d
as
to
the
are
that
Insurance
be c h a r g e d
for
rates
year,
each
necessary
time.
until
of
the
shall
insurance
and
according
to
shall
circum­
The
regular
c o mme r c i a l
f und
reaches
the
prescribed
balance
established
attained
the
shall
reduced
be
maintain
shall
t i me
required
the
by
f und
be c h a r g e d
original
by
expense
the
balance
to
and
volved
shall
the
loans,
to
charged
the
level
f und
for
pay
has
coverage
required
a sufficient
program to
if
the
to
pr emi um
bac k
t he
any,
within
a reasonable
be d e t e r m i n e d
by
the
consist
and
subsequent
change
in
by
Division
of
inspection
of
a compr ehensi ve
r e c o mme n d a t i o n
district
take
Co p i e s
to
of
all
on
corrective
inspection
of
the
Insurance.
a pertinent
risk
reports
initial
of
all
arrangement
action
to
reduce
shall
rates
properties
The
listing
the
in­
inspection
risks
to
with
allow
their
the
rate.
be f u r n i s h e d
to
the
sy s t e m.
In o r d e r
buildings
shall
location,
Division
or
rates
However ,
enable
After
period.
shall
tion,
the
t he' D i r e c t o r
balance.
The o r i g i n a l
local
legislature.
facilitate
be c l a s s i f i e d
availability
may use s t a n d a r d
develop
Division
to
their
not
to
underwriters
for
the
The
Division
exceed
determination
according
of
to
type
protection,
rating
own s y s t e m.
are
rate
The
those
met hods
rates
and
and
all
of
school
construc­
age.
The
classification,
established
by t h e
char ged- by c o mme r c i a l
same c o v e r a g e .
shall
notify
the
local
districts
of
the
appro p riate
each
year.
The
T reasurer,
excess
who
funds
Insurance
s ta te ,
the
funds
is
is
the
State
other
rate
and
should
cost
of
to
property
shall
the
f i l e
a
shall
and
on
as
the
the
other
the
State
program.
agency
any
excess
Any
of
of
the
raids
funds
e stab lish in g
a
to
D ivision
make
for
possible
on
or
the
premium
r e d u c t To n
of
the
schools.
by
advise
its
and
inspectors
and
the
any
and
local
stru ctu res
on
Insurance
local
school
of
s tru c tu re ,
that
on
each
This
in­
occupancy,
migh.t
The
systems
Insured
app raisers.
occupants.
report
of
inspection
hazards
its
shall
recommend
the
b u ild in g
and
comprehensive
and
annual
the
D ivision
for
engineers
consider
old
the
assistance
b u ilding
both
of
provide
D ire cto r
The
school
for
to
e ve n tu ally
the
ro u tin e,
of
the
In
soon
d ir e c tly
by
Those
considered
function
shall
ma i n t a i n a n c e
with
any
L eg is la tu re
purposes.
to.
prime
D ivision
shall
accumulated
by
as
paid
custodian
used
provide
service
spection
be
due
Provided
The
safety
be
insurance
be
as
reserves
be
premiums
shall
act
to
are
school
to
not
revenues
The
premiums
or
for
Functions
and
are
nor
shall
rates
a ffe c t
the
engineers
property
inspected
d is t r i c t .
act
and
as
consultants
new
safety
to
con stru ctio n .
devices
and
the
They
provide
leadership
in
management.
lo c a l,
Once
The
s ta te ,
the
and
should
reduction
of
property
In it ia t in g
is
be
from
w ill
ested
a ffected
w ill
adopted
by
to
school
the
a
fire s
with
of
a
the
new
major
of
loss
and
to
program
The
if
or
of
this
e ffo r t
support
when
this
of
of
type
a ll
a ll
and
the
gram.
the
phase
State
should
be
Department
held
s ta te
at
group
various
meetings
o b je c tiv e
pants
a d m in istra to rs ,
ap p ro p riate
A
and
in te r-
interested
program
is
an
of
educational
to
be.
Public
program
In s tru c tio n ,
l
school
lif e
Montana.
concerted
p a rtie s .
required
f i r s t
acquaint
the
between
prevention
minimum
risk
insurance.
D iv is io n 's
loss
in
and
coordinator
dealing
with
insure
as
s a fe ty ,
Montana.
The
to
concerned
require
be
programs
operation
i n it ia t i o n
p a rtie s
act
f ir e
Program
magnitude
and
in
a sp ects,
shall
federal
hazards
the
The
,technical
D ivision
program
emphasis
and
the
at
with
im p lica tio n
of
for
seminars
locations
of
th is
the
state
the
fea tu re s
o f f ic ia ls
or
school
the
board
with
informal
throughout
would
of
’
school
concerned
poi,nt
the
the
association s,
the
proposed
discussions
the
s ta te
o rg an iza tio n s.
be
to
f a m ilia r iz e
program
systems
in
and
and
pro­
could
at
be
the
The
primary
the
p a rtic i
its
economic
Montana.
Special
e mp h a s i s
of
should
Insurance
ity
of
can
s t e mmi ng
Next,
care
should
least
urer,
to
the
and
it
All
these
of
i mpr ovi ng
This
proposal
any
the
the
of
to
possibility
and
State
of
the
These
and
to
to
support
to
these
the
support
and
Legislature
successful
before
include
Treas­
officers
are
t hey
and must
be
presented
procedure
for
the
of
is
by
in
light
should
p r o g r a m.
presenting
there
enact ment
and
State
consideration
This
if
the
project.
backing
essential
in
Particu
wo u l d
program
r e c o mme n d a t i o n s
pr ogr am.
role
the
be d e r i v e d ,
serious
costs.
pr ogr am.
agencies
If
probabil­
assist
exact
and w o r t h w h i l e
proposed
is
are
Division
the
insurance
Co mmi s s i one r ,
be g i v e n
support
the
clarify
the
and
prepared
Marshall.
a useful
should
in
wh i c h
the
benefits
in wi despread
type
to
Fire
suggestions
groups
result
is
to
that
schools,
increases
group.
actively
of
the
Insurance
State
be a wa r e
convinced
ea c h
service
agencies
be t a k e n
State
the
rapid
state
of
participate
must
the
the
for
be e x p o s e d
responsibility
at
to
provide
the
program shoul d
Iar
be g i v e n
t he
goi ng
to
enabling
be
legis­
lation.
Before
should
be
tutional
presentation
reviewed
conflicts.
to
by a t t o r n e y s
If
such
the
for
legislature
statutory
conflicts
the
proposal
and/or
do e x i s t
const I
provisions
should
be
incorporated
d i f f i c u l t i e s .
le g is la tu re
The
into
proposal
through
the
the
proposal
should
usual
then
channels
to
be
remove
such
presented
for
the
to
the
assemblies'
con sid eratio n .
Assuming
next
phase
necessary
State
a
w ill
to
of
f a c i l i t i e s .
p re fe ra b ly
problems
to
planning,
who
Public
the
with
a c c o u n ta b ility .
other
The
the
program,
of
the
State
of
be
of
the
.will
appropriate
to
appoint
Superintendent
of
a
D ire cto r,
both
educational
form ulate
his
p o lic ies
and
be
should
closely
physical
i n i t i a l
agencies
developed
documentation,
planning,
in
fis c a l
be
w ith
Public
and
under
year
and
involved.
during
the
controls,
involved
coo rd in atio n,
The
estab lish
the
should
D irecto r
proposal.
shall
the
functions
During
departments
working
a d m in is tra tiv e
provide
p ra c tic e s .
as
le g is la tu re ,
w e ll-q u a lifie d
d e ta ils
such
the
the
In stru ctio n
w ill
D ire cto r
process
of
and
is
by
operation
step
insurance
period,
continuous
of
next
a d m in is tra tiv e
planning
the
Insurance
someone
action
e stab lish
implement
The
and
procedures
All
be
Superintendent
D ivision
for
favorable
in
and
the
In s tru c tio n .
and
a
evaluation
d ire c tio n
CHAPTER -V I
SUMMARY,
CONCLUSI ONS,
AND RECOMMENDATIONS
Summary
The
people
288 m i l l i o n
and
dollars
secondary
increasing
amount
at
of
this
Mont a na
in
property
about
rate
of
period
of
time.
i nvestment
presently
is
insurance
coverage.
currently
nearly
sizable
cost
to
present
t i me
all
the
schools
the
local
of
to
the
Boar d o f
Therefore,
are
little,
vary
school
uniformity
widely
as
to
the
total
such
i nvestment
in
is
year.
over
e c onomi c
involved.
c o mme r c i a l
this
protection
is
whi ch
represents
a
this
Mont ana.
study
At
at
the
t he
do c a r r y
mandatory.
Mont ana,
insurance
This
substantial
a severe
not
of
is
accumul at ed
any
system of
Codes
per
system
of
year,
it
elementary
by p u r c h a s i n g
cost
included
revised
of
school
per
although
purchase
l oss
represent
educational
schools
This
protected
$1,000,000
protection
the
there
The
for
public
i nvest ment
The
wo u l d
for
approximately
$10 m i l l i o n
a substantial
The
seventy-five
used
the
problem
insurance
invested
purposes.
and e d u c a t i o n a l
property
ha v e
educational
represents
an e x t e n d e d
part
of
Title
1947,
permits
discretion
of
Trustees.
there
are
districts.
in
the
the
as
many
insurance
Apparently,
pr ogr am.
procedure
for
there
pr ogr a ms as
is
The a p p r a i s a l
purchasing
very
practices
coverage,
or
selecting
must
rev|ew
its
to mai ntai n
coverage.
be
the
company and a g e n t s .
practice
a balanced
At
lacking.
the
the
others
do so o n l y
any
duties
once
policies
cate d ,
since
due
to
available,
and
the
the
need
Most
to
of
need
and
desire
disregard
has
been
for
the
of
the
social
in
property,
are
the
and
this
rapidly
of
Also,
a
and
use
the
reasonable
with
develop
a hi gh
therefore
area.
unrest
disturbances,
cost
in
at
to
comp I I
now i n
involved
field
political
riots,
t he
t oo
their
coverage
needed.
s c h ool
insurance
in
mor e
facilities
adequat e. . I n s u r a n c e
in
have
an u r g e n t
bec omi ng
processes
while
and a
personnel
of
to
boards
creates
is
and
basis,
local
types
educational
assistance
increasing
of
is
it
seems
buildings
f ew
This
if
intervals,
s c h ool
administrators
resulting
year
field
sy s t e m
insurance
requirement
Very
the
appraisal
in
program o f
on an a n n u a l
insurance.
procedures
c o mp e t e n c e
nation,
to guide
local
constantly
their
five
years.
receive
Be caus e o f
the
ten
or
complexity
school
this
appraise
insurance
and
operational
level
t i me
contents
extensive
rating
schools
cost.
the
policies
realistic
three
with
the
the
of
at
every
connected
pr obl em,
present
Inventory
f or ma l
and
Some s c h o o l s
update
f ew o n l y
and
Each
this
recent
type
years.
throughout
and
of
flagrant
insurance
I n some m e t r o p o l i t a n
West
Coasts,
write
insurance
institutional
either
the
schools
cannot
afford
refuse
to
c o mp a n i e s
insurance
tinues,
may
cost
will
develop
some f o r m o f
property.
of
the
There
are
p r o g r a ms
North
they
and
five
of
the
states
this
wo u l d
the
cost
a savings
to
ha v e
The y
Several
large
with
degrees
of
Mont a na
From a r e v i e w
program--!t
of
the
c o mme r c i a l
20
the
be
and
60 p e r
underwriters
cities
be f o r
also
Mont ana
s c h ool
sole
benefit
r e mov e d.
statewide
to
c ompa ni e s
protect
for
North
con­
altogether.
to
woul d
to
compr ehensi ve
Sout h
Carolina,
states
cent
of
provide
operate
estimate
what
the
such
it
same
pr ogr a ms
success.
attempted
proved
from
c o mme r c i a l
protection.
varying
whe r e
and W i s c o n s i n . - T he s e
of
reluctant
to a poi nt
operate
are
and
trend
insurance
factor
Ea s t
this
property
now o p e r a t i n g
nature.
If
p r o b l e m woul d
public
profit
D a k o t a , A l a b a ma ,
realize
or
the
bec omi ng
Increase
Such a p r o g r a m wo u l d
schools
on
coverage.
i nsure, i n s t i t u t i o n a l
to
bot h
are
protection,
One a l t e r n a t i v e
to
areas,
a state
literature
unsuccessful
insurance
available
for
was e s t a b l i s h e d
t he
program
relating
following
1.
No r e s e r v e
initiated.
2.
The p r o g r a m had no way o f s e c u r i n g
needed i n i t s e a r l y y e a r s .
in
to
1935.
this
reasons:
when t h e p r o g r a m was
extra
f unds
if
117
3.
Inadequate
program t o
4.
Lac k o f u n d e r s t a n d i n g
o f f i c i a l s involved.
5.
Too much r e i n s u r a n c e , s i n c e n e a r l y
p r o v i d e d f o r under t h i s appr oach.
6.
A s t r o n g i n s u r a n c e l obby a g a i n s t t he pr ogr am.
The
l e g i s l a t i o n was p r e s e n t e d t o t h e p e o p l e w i t h a
r e f e r e n d u m v o t e s h o r t l y a f t e r t h e p r o g r a m began
o p e r a t i o n , and was r e p e a l e d i n t h i s manner b e f o r e
a d e q u a t e t i m e was a l l o w e d t o t e s t t h e p r o g r a m.
Based
need o r
on t h e
be f o r c e d
program because
current
the
in d e a l i n g
with
considers
to
rising
relating
this
of
be t h e
better
from
all
in
the w r i t e r
fire
used
s y s t e m may
the
insurance
revi ewed
t he
insurance,
in
and
Mont ana
p r o g r a m was o u t ­
incorporates
of
we r e
As an a l t e r n a t i v e
state
features
state
risks
by s c h o o l s
insurance.
t he
the
school
a change
a public
outline
the
school
presently
type
This
to
to enable
support
that
costs,
protection,
briefly.
and
re-evaluate
practices
c o mme r c i a l
lined
of
and s t a f f i n g
effectively.
assumpt i on
to
literature
e x a mi n e d
to
planning
function
the
wh a t
the w r i t e r
program p r e s e n t l y
in o p e r a t i o n .
Conclusions
Duri ng
the
study
the
fire
insurance
protection
wer e
exami ned,
with
insurance
the
program f o r
of
policies
the
objective
the
schools
and
school
practices
s y s t e ms
of
preparing
in
this
of
t he
i n Mont ana
a public
state.
The
fire
fol-
118
l owi ng
conclusions
seem t o
1.
P u b l i c s c h o o l p e r s o n n e l a r e not
f i e l d of i nsur anc e p r o t e c t i o n .
2.
Sc hool
use o f
3.
S e c u r i n g a d e q u a t e and p r o p e r i n s u r a n c e
a maj or a d m i n i s t r a t i v e pr obl em.
A.
T h e r e a p p e a r s t o be v e r y l i t t l e u n i f o r m i t y i n t h e
schools' p r a c t i c e s of handling f i r e insurance.
5.
Sc hool
risk.
6.
Tho s e s t a t e s c u r r e n t l y o p e r a t i n g p u b l i c
i n s u r a n c e p r o g r a ms hav e been s u c c e s s f u l
p r og r a m s .
7.
C u r r e n t l y - o p e r a t i n g s t a t e plans are less
t h a n c o m p a r a b l e c o mme r c i a l p r o t e c t i o n .
8.
A statew ide
public
insurance program fo r
the p u b lic
s c h o o l s w o u l d be e c o n o m i c a l l y
possible
in M on tan a .
9.,
Such a p r o g r a m
appro vaI *
10.
Some
people de s ir e
i ns u r a n e e .
property
school
school
Since
d is tr ic t s
insurance
reported
about
year
over
past
ten
s ta te
would
generate
insurance
this
study
a
be
training
qualifies
presently
losses
two
to
hundred
years,
program.
should
and
as
in
in
the
t he
coverage
is
a preferred
school
w i t h such
expensive
require
legislative
favor
public
a
program.
f i r e
only
schools
well-versed
i n Mont a na wo u l d
averaged
the
guidance
usually
have
in
be a p p r o p r i a t e :
it
f i f t y
seems
su b stan tial
A
plan
adequate
schools,
to
probable
as
pay
the
a ll
shown,
thousand
savings
such
as
by
one
per
that
the
adopting
outlined
losses
and
a
operating
expenses
with
a reasonable
ma r g i n
of
safety
financially.
Recommendations
It
adopt
is
a. s t a t e
of
Mont ana.
to
this
the
r e c o mme n d a t i o n
public
Several
program a r e
fire
of
insurance
this
pr o g r a m
r e c o mme n d a t i o n s
presented,
as
writer
related
for
that
the
Mont a na
schools
specifically
follows:
1.
The i n i t i a l one y e a r p l a n n i n g p e r i o d
t he. p r o g r a m ' s e f f i c i e n t o r g a n i z a t i o n
operation.
2.
The D i r e c t o r ' s s a l a r y must be s u f f i c i e n t t o a t t r a c t
a w e l l - q u a l i f i e d i n d i v i d u a l , and h i s p o s i t i o n s h o u l d
be a p p o i n t i v e and n ot p o l i t i c a l .
3.
The r e s e r v e
other state
b.
The r e s e r v e f u n d must
l evel be f or e t her e is
rates.
5.
A m a j o r f u n c t i o n o f t h e D i v i s i o n s h o u l d be t o p r o ­
v i d e r i s k management t r a i n i n g and a d v i c e t o t he
l o c a l school d i s t r i c t s .
6.
An e d u c a t i o n a l p r o g r a m s h o u l d be e s t a b l i s h e d
e n h a n c e t h e k n o wl e d g e o f s c h ool p e r s o n n e l i n
to insurance procedure.
7.
The p r o g r a m s h o u l d be e v a l u a t e d on a c o n t i n u i n g
b a s i s t o i mp r o v e and e n l a r g e t h e p r o g r a m as n e e d e d .
8.
Local school p e r s o n n e l
i n t h e pr og r a m.
should
Since
be a
there
f und must
agencies.
appears
to
be s a f e g u a r d e d
is e s s e n t i a l
and e a r l y
from
raids
to
by
be b u i l t up t o t h e r e q u i r e d
any r e d u c t i o n i n pr emi um
be a c t i v e l y
lack
of
to
regard
engaged
I n f o r m a t i on
at
120
the
local
level,
well-versed
further
in
and
the
research
since
most
insurance
be c a r r i e d
school
field,
on
in
it
the
personnel
is
are
not
r ecommended
following
that
areas:
1.
A s i m i l a r st udy of o t h e r types of school i n s u r a n c e ,
such as l i a b i l i t y and t r a n s p o r t a t i o n , be c o n d u c t e d .
2.
The d e s i r a b i l i t y o f i n c l u d i n g a l l
such a p r o g r a m be i n v e s t i g a t e d .
3.
T h a t a u n i f o r m r e c o r d i n g s y s t e m be d e v e l o p e d
use by a l l s c h o o l d i s t r i c t s .
4.
An i n v e s t i g a t i o n be made i n t o t h e use o f s a f e t y
d e v i c e s , such as o u t s i d e a l a r m s y s t e m s , t o r e duc e
t h e amount o f l o s s e s .
state
property
for
in
APPENDIXES
APPEND I X A
123
F I RE INSURANCE PROGRAM QUESTI ONNAI RE
MONTANA PUBLI C SCHOOL SYSTEMS
Name o f
Sc hool
Sy s t e m_________________________________ _ D a t e ________
C o u n t y __________________________
The f o l l o w i n g q u e s t i o n s d e a l w i t h t h e s c h ool d i s t r i c t as a
whole.
These q u e s t i o n s a r e concer ned w i t h cov e r a ge f o r a I I
b u i l d i n g s and t h e c o n t e n t s o f a l l b u i l d i n g s i n t h e e n t i r e
school d i s t r i c t .
The answer' s s h o u l d be s e c u r e d f r om t h e
i n s u r a n c e r e g i s t e r o r f r o m t h e p o l i c i e s wh e r e a p p r o p r i a t e .
P l e a s e use t h e bac k o f eac h s h e e t f o r a n s we r s t h a t may
r e q u i r e a d d i t i o n a l space.
1.
What i s t h e t o t a l v a l u e
c o n t e n t s in your school
Buildings
$____ '
2.
What
year
3,
How much o f
4.
How many
5.
What
fire
6.
How was
(If
7.
__________
is your c u r r e n t
1969-70?
this
are
is the c u r r e n t
insurance?
rate
by f o r m u l a ,
Ar e y o u r b u i l d i n g s
a b I a n k e t p o I ?c y ?
is
allocated
and
$__ ______________ _____
for
for
the
fire
a c a d e mi c
insurance?
d i s t r i c t ? ______
by y o u r
district
for
a t ? __________
the
insured
buildings
in your
now p a i d
arrived
is
budget
utilized
rate
wh a t
Contents
operating
budget
buildings
this
o f a l l school
district?
f o rmuI a ? ) _ ______________________
as
independent
risks
or
under
I 24
8.
What
is
the
Buildings
9.
Specify
total
$
the
amount
of
fire
______ ^
_________
types
insurance
Contents
and amount s
of
$
extended
Ty pe
10,
b)
Amount s
Fire
insurance
on:
1.
Buildings
$_________ '
2.
Contents
$......... ...............................
3.
Combi ned
Extended
under
_________
blanket
policy
$
_______ ______
coverage:
I .
$
______ ;_________ f o r
2.
$..................................
for
wh a t
t y p e ? ________________
wh a t
t y p e ? ____________ '
What i s t h e n e a r e s t a p p r o x i m a t e p e r c e n t a g e o f you r
i n s u r a n c e c o v e r a g e s a c c o r d i n g t o t y p e s and p o l i c y
p e r i o d s , as f o l l o w s :
Cont ent s
B u i ldings
a)
One-year
term
b) Three-year
c)
12,
coverage:
What i s t h e t o t a l amount o f a n n u a l pr emi ums now b e i n g
p a i d by y o u r d i s t r i c t f o r t h e f o l l o w i n g t y p e s o f
insurance protection?
a).
11.
coverage?
Five-year
Gi ve t h e
by y e a r s
term
...............
term
t o t a l amount o f
as i n d i c a t e d :
your
fire
%
%
%
%
%
%
l osses
by
types
and
125
Bui l d i n g s
1960
.....................
1961
______________
1962
______________
1963
_____________
Ex t e n d e d
Cover age
Pr emi ums
Pa i d
1964 ................................
1965 ' ' ' '
1966
________
.............................
1967 ' '________ '
1 9 6 8 ' .....................
1969 '
13.
Gi ve
year
' '
the
for
t o t a l amount s o f
the ten y e a r s :
Fire
1960
1961
'
Los ses
your
Recover ed
' '______________________
recoveries
by
Ex t e n d e d C o v e r a g e
Recove r ed
________________________
___________________________________________________________
____________________________________________________________________
1962 ' ________ ;_________ __________
___________________________
1963
________________________ _
19 64 '
'
insurance
___________________________
'
____________________
1 965
.................. ............. .........................
1966
...................
196?
....................................
_____________________
......................................................
...................
............. '
'
_______
1968 .......................................................
' ___________________________
1969
.................................................
I 26
14.
15.
I n d e t e r m i n i n g t h e amount s o f f i r e i n s u r a n c e t o be
p l a c e d on y o u r s c h o o l p r o p e r t y , wh a t met hod i s used t o
a r r i v e a t t h e f u l l , sound o r t r u e v a l u e o f y o u r p r o p e r t y ?
a.
By whom?_____________ _______________ How f r e q u e n t l y ? __________
b.
If
by an a p p r a i s a l
How i s t h e i n s u r a b l e
i ng d e t e r m i n e d ?
a.
By t a k i n g
value
inventory?
....................................'
16,
firm,
give
of
contents
Ye s____No____ I f
________ b.
What p r o p o r t i o n a l amount s o f
coverage I nsurance is pl aced
insurance
the
name and a d d r e s s : _________
so,
your
build-
by whom?_______
How f r e q u e n t l y ? __ ____________
your f i r e
with:
and e x t e n d e d
a.
Mu t u a l
h.
Stock
c.
Ot h e i -----S p e c i f y : _____________________________
insurance
of
c o mp a n i e s
c o mp a n i e s
_________ _____ _%
'_______________ %
_______________ X
17.
I f y o u r p a y me nt s a r e made t o c o mme r c i a l i n s u r a n c e
c o mp a n i e s as p o l i c y pr emi ums f a l l d u e , i s a p p r o x i m a t e l y
t h e same amount p a i d eac h y e a r ?
Ye s _____
No_____
18.
How do you d i s t r i b u t e
panies
( b) agents
y o u r i n s u r a n c e b u s i n e s s : ( a)
( Che c k a p p r o p r i a t e a n s w e r s )
com­
a . To Compani e s :
1.
2.
3.
4.
5.
6.
L e t l o c a l a g e n t s c ho os e c o m p a n i e s . ______
Use a r a t i n g s y s t e m such as B e s t ' s . ______
The Boar d o f E d u c a t i o n , S u p e r i n t e n d e n t , o r b u s i n e s s
ma na g e r a l l o c a t e s p o l i c i e s t o c o m p a n i e s . ______
The Boar d o f E d u c a t i o n s e t s up c e r t a i n c r i t e r i a ,
such as s i z e , l i q u i d i t y , r e s e r v e s , e t c . , as a
b a s i s f o r s e l e c t i o n . ______
The Boar d o f E d u c a t i o n a s k s f o r b i d s . ______
Ot her? ( D e s c r i b e )
....................... .......................................................
127
b.
Jo
Local
1.
2.
U n c o n t r o l l e d d i s t r i b u t i o n . ______
Ask a l l l o c a l a g e n t s t o wor k w i t h t h e Boar d
i n d e t e r m i n i n g d i s t r i b u t i o n . ______ .
Boar d s e t s up e l i g i b i l i t y r e q u i r e m e n t s and
t h e n a l l o c a t e s b u s i n e s s t o l o c a l a g e n t s who
meet t h e s e r e q u i r e m e n t s . ______
I nsurance business is d i s t r i b u t e d to a l l l ocal
a g e n t s on an e q u a l b a s i s . ______
Tend t o c o n t i n u e t h e same a g e n t s i n c e t h e
s e r v i c e has been s a t i s f a c t o r y . _ _ _ _ _
D i s t r i b u t i o n i s made by s u p e r i n t e n d e n t o r
b u s i n e s s ma n a g e r . _____ _
Ot h e i — S p e c i f y : ________________________________________
3.
4.
5.
6.
7.
19.
Agent s:
I f y o u r d i s t r i c t uses a s e t o f f or ms f o r r e c o r d k
keep
e e p iIn g
f o r t he i n s u r a n c e pr ogr am, k i n d l y a t t a c h c o p i e s .
I f an
i n s u r a n c e r e g i s t e r is used, p l e a s e g i v e a b r i e f
d e s c r I p t ion.
I f no s y s t e m i s used o t h e r t h a n f i l i n g
p o l i c i e s i n one p l a c e , p l e a s e c h e c k .
check a l l
policies
t he
Do you
21.
C o n s i d e r i n g t h e s i z e and t y p e o f c o n s t r u c t i o n , wha t
c e n t o f y o u r b u i l d i n g s have no i n s u r a n c e a t a l l ?
Ty pe o f
concurrency?
of
20.
S I ze
for
all
'
Construction
Ye s___
% Not
No
per
I nsu r ed
One- Room B u i l d i n g s
Fr ame .
B r i c k or st one
Ho l l o w Bl ock
______
'_____%
______________ %
%
Two- Room
Fr ame
B r i c k or stone
Hol l ow bl ock
__ _____________%
_______________ %
%
Fr ame
B r i c k or stone
Ho l l ow Bl ock
_______________ %
___________
%
_______________ %
Three
or
Mor e
Rooms
128
22.
Do you
use a c o - i n s u r a n c e
plan
Yes _
No _____
What c o - i n s u r a n c e p e r c e n t a g e do you use?
______ 60% ______ 70%
______ 80% ______ 90% ______ % O t h e r
23.
I f you do n o t use c o - i n s u r a n c e , wha t p e r c e n t a g e o f
t r u e and a c t u a l v a l u e o f t h e p r o p e r t y i s i n s u r e d ?
______________ %
24.
Ans we r
25.
Does y o u r Boar d hav e any e d u c a t i o n a l
a s s i s t you i n h a n d l i n g t h e i n s u r a n c e
d i s t r i c t ? Yes
■
No _____
26.
I f you hav e s u f f e r e d any l o s s e s c o v e r e d by i n s u r a n c e ,
wh a t has been you r e x p e r i e n c e w i t h t h e c o mp a n i e s i n
ma k i ng s e t t l e m e n t s ?
question
Excellent
27.
28.
;
23 w i t h
respect
Good______ ;
to
c o n t e n t s : _____________%
p o l ic ie s that
program f o r your
F a i r ______ ;
Poo r_______
Do you t h i n k you r e c e i v e
pr emi um d o l l a r s p e n t f o r
maxi mum p r o t e c t i o n
insurance?
Yes
Uncerta i n
Additional
No
Comment s:
the
for
each
I 29
APPENDI X
B
»»
Montana State University-
Bozeman, M ontana 59715
TeL
406-587-3121
130
January
27 ,
1970
Dea r
I am c u r r e n t l y c o n d u c t i n g a s t u d y u n d e r t h e s u p e r v i s i o n o f
D r . R o b e r t Th i beau I t , C o l l e g e o f E d u c a t i o n , and D r . Ha r v e y
L a r s o n , D i r e c t o r , School o f Commer c e, Mont a na S t a t e U n i v e r ­
sity.
T h i s s t u d y i s d e s i g n e d t o e x a mi n e t h e c o s t o f f i r e
i n s u r a n c e , and t h e p o s s i b i l i t y o f e s t a b l i s h i n g a s t a t e f i r e
i n s u r a n c e p r o g r a m f o r t he. p u b l i c s c h o o l s y s t e ms i n Mo n t a n a .
I t i s i m p e r a t i v e t h a t I o b t a i n i n f o r m a t i o n f r o m y o u r s c h ool
d i s t r i c t in o r d e r t o devel op a composi t e s t a t e p i c t u r e .
I
r e a l i z e t h a t , t h e b e s t a p p r o a c h wo u l d be t o v i s i t each
d i s t r i c t and s e a r c h o u t t h e i n f o r m a t i o n m y s e l f , b u t due t o
t h e d i s t a n c e s i n v o l v e d , t h e number o f d i s t r i c t s , and t h e
c o s t i t i s v i r t u a l l y i m p o s s i b l e f o r me t o do s o .
Thus,
i t a p p e a r s t h a t I must r e l y upon t h e good w i l l and c o­
o p e r a t i o n o f t h o s e who wor k w i t h t h e f i r e i n s u r a n c e
p r o g r a ms i n t h e d i s t r i c t s i n v o l v e d .
T h e r e f o r e , I am e n c l o s i n g a q u e s t i o n n a i r e w h i c h d e a l s , w i t h
school f i r e i n s u r a n c e pr ogr ams.
I f u l l y re a liz e that this
may p l a c e some i m p o s i t i o n upon y o u r o f f i c e , b u t I s i n c e r e l y
b e l i e v e t h a t t h i s s t u d y c o u l d be b e n e f i c i a l , n ot o n l y t o
you r d i s t r i c t b u t t o t h e e n t i r e S t a t e o f Mo n t a n a as w e l l .
The q u e s t i o n n a i r e may a p p e a r somewhat l e n g t h y , b ut t h e
a n s we r s a r e s h o r t and s h o u l d r e q u i r e a mi ni mum o f t i m e . t o
complete.
A study of t h i s t ype could ( I ) i n i t i a t e a s i g n i f i c a n t
s a v i n g s f o r a l l s c h ool , d i s t r i c t s i n t h e s t a t e , ( 2 ) a c t as
an i n c e n t i v e f o r c o mme r c i a l c o mp a n i e s t o. r e - e x a m i n e t h e i r
own r a t e s , (.3) p r e s e n t a c l e a r s t a t e - w i d e p i c t u r e o f f i r e
i n s u r a n c e p r a c t i c e s now b e i n g u t i l i z e d , and ( 4 ) p r e s e n t
t he a d m i n i s t r a t o r w i t h the f a c t s necessary to up - d a t e
current practices.
Bozeman, Montana 59715
T el.
131
I n summar y, I wo u l d be v e r y a p p r e c i a t i v e i f you woul d
c o m p l e t e t h e e n c l o s e d q u e s t i o n n a i r e and r e t u r n i t t o me
as soon as p o s s i b l e .
P l e a s e use t h e e n c l o s e d s e l f a d d r e s s e d , st amped e n v e l o p e f o r y o u r r e t u r n .
Yo u r i n f o r
mat i on w i l l o n l y be used f o r c o m p i l a t i o n o f a f a c t u a l
p r o f i l e of c u r re n t p r a c t i c e s .
Any s u g g e s t i o n s you mi g h t
c a r e t o o f f e r w i l l be a p p r e c i a t e d .
At t h e c o n c l u s i o n o f
t h e s t u d y a summary o f t h e f i n d i n g s and r e c o mme n d a t i o n s
w i l l be s e n t t o y o u .
Sincerely,
Harold
Sc hool
Enc.
H.
of
Ho l e n
Commerce
406-587-3121
Bozeman, Montana 59715
Tel.
406-587-3121
132
Mar ch
6,
1970
Dear
A f ew weeks ago you r e c e i v e d an i n s u r a n c e q u e s t i o n n a i r e
c o n c e r n i n g t he p r o p e r t y in your school d i s t r i c t .
Pe r h a ps
you ha v e a l r e a d y c o m p l e t e d i t and l a i d i t a s i d e f o r f u t u r e
mailing.
I f s o , t h i s l e t t e r i s i n t e n d e d as a f r i e n d l y
r e m i n d e r t h a t we wo u l d be v e r y p l e a s e d i f you wo u l d r e t u r n
i t to us.
H o w e v e r , you may hav e been t o o busy w i t h y o u r o t h e r d u t i e s
to compl et e the q u e s t i o n n a i r e .
I woul d s u g g e s t t h a t you
m i g h t be a b l e t o c o m p l e t e i t b e f o r e o t h e r a p p r o a c h i n g
a c t i v i t i e s , such as t h e b u d g e t , a r e upon y o u .
A f ew
mi nut es o f your t i me is a l l t h a t is r e q u i r e d .
I t i s p o s s i b l e t h a t you w i l l be i n t e r e s t e d i n t h e f i n d i n g s
o f t h i s s t u d y ; but f o r t he r e s u l t s t o p r e s e n t a t r u e p i c t u r e
o f i n s u r a n c e p r a c t i c e s i n M o n t a n a , i t i s most i m p o r t a n t t h a t
a l l t h e s c h o o l s y s t e ms be i n c o r p o r a t e d i n t h e s t u d y .
The
r e s u l t s o f t h i s s t u d y w i l l be made a v a i l a b l e t o you s h o r t l y
a f t e r i t is completed.
Ho we v e r , t o make t h e s t u d y v a l i d
i t is necessary t h a t ever yone compl et e the q u e s t i o n n a i r e .
I f i t is at a l l p o s s i b l e f o r
and r e t u r n t h e q u e s t i o n n a i r e
a b l y by Mar ch 2 0 , 1 9 7 0 .
For
e n c l o s e d a n o t h e r copy o f t h e
you t o do s o , p l e a s e c o m p l e t e
as soon as p o s s i b l e , p r e f e r ­
y o u r c o n v e n i e n c e I have
questionnaire.
Sincerely,
Harold
Sc hool
Enc.
H.
of
Ho l e n
Commerce
Tel. 406-587-3121
Bozeman, M ontana 59715
133
AprM
17,
1970
De a r
L a s t mont h you r e c e i v e d an i n s u r a n c e q u e s t i o n n a i r e a b o u t
f i r e and e x t e n d e d c o v e r a g e on y o u r d i s t r i c t ' s s c h o o l
property.
T h i s l e t t e r i s i n t e n d e d as a f r i e n d l y r e m i n d e r
t h a t I hav e not r e c e i v e d a r e s p o n s e f r o m y o u r d i s t r i c t .
I r e a l i z e t h i s i s a busy t i m e o f y e a r f o r you and y o u r
staff.
However, a l l
I a s k i s a f ew m i n u t e ' s t i m e f r om you
or your c l e r k .
To make t h i s s t u d y as c o m p l e t e and c o mp r e ­
h e n s i v e as p o s s i b l e I am a g a i n s o l i c i t i n g y o u r c o o p e r a t i o n .
Bot h t h e S t a t e A s s o c i a t i o n o f Sc hool A d m i n i s t r a t o r s and t h e
S t a t e A s s o c i a t i o n o f I n s u r a n c e Ag e n t s have e x p r e s s e d c o n s i d ­
e r a b l e i n t e r e s t in t h i s st udy.
i n o r d e r t o p r e s e n t an
o b j e c t i v e and t h o r o u g h r e p o r t t o t h o s e c o n c e r n e d i t i s
i m p e r a t i v e t h a t as many r e t u r n s as p o s s i b l e be i n c l u d e d .
H o p e f u l l y , t h e f i n d i n g s w i l l be o f h e l p t o b o t h t h e s c hool
a d m i n i s t r a t o r s and t h e i n s u r a n c e p e o p l e .
C o n s i d e r i n g the
c u r r e n t s t a t e o f s o c i a l u n r e s t t h r o u g h o u t t h e n a t i o n and
t h e somewhat d e p r e s s e d e c o n o mi c a c t i v i t y , i t i s i m p e r a t i v e
t h a t t h o s e , o f us e ng a ge d i n e d u c a t i o n a t t e m p t t o f i n d
e q u i t a b l e s o l u t i o n s t o some o f t h e e c o n o mi c and s o c i a l
p r o b l e ms w h i c h now c o n f r o n t u s .
At t h e p r e s e n t o v e r one h u n d r e d t h i r t y r e t u r n s hav e been
r e c e i v e d o u t o f s l i g h t l y o v e r t wo h u n d r e d m a i l e d .
This
number i s s u f f i c i e n t t o p r o v i d e much o f t h e i n f o r m a t i o n ,
b u t I t wo u l d be mor e a c c u r a t e i f e v e r y o n e wo u l d p a r t i c i ­
pate.
T h e r e f o r e , I am t a k i n g t h i s o p p o r t u n i t y t o r e q u e s t
y o u r c o o p e r a t i o n and a s s i s t a n c e i n t h i s p r o j e c t .
Sincerely,
Harold
Sc hool
H.
of
He l e n
Commerce
SELECTED REFERENCES
135
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Albers, Frank.
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Administration.
New
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"
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and
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•
" F i r e I n s u r a n c e : How t o Get Mor e P r o t e c t i o n
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' I n s t i t u t e , 1968.
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~
I n s t i t u t e , 1969.
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m a t i o n , M a r c h , 1 9 6 9 , pp. 2 - 7 .
of
Insurance
infor­
Ka t z e n me y e r , R o b e r t G„
"How t o Save Money on F i r e I n s u r ­
a n c e , " School M a n a g e me n t , V ( May , 1 9 6 1 ) , 1 1 4 - 1 1 5 .
K n e z e v i c h , S t e p h e n J . , and John Guy F o w l k e s .
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New Y o r k : H a r p e r
B r o t h e r s , I 9^0 . ■
Man­
and
Levy, M i c h a e l .
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s u r e d , " Sc hool M a n a g e me n t , I I ( S e p t e m b e r , 1 9 5 7 ) , 3 2 - 3 4 .
L i n n , He nr y H . , and S c h u y l e r C. J o y n e r .
Insurance Pr ac ti ces
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M i l l e r , H a r r i e t . _ Biennial
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ena: S u p e r i n t e n d e n t of
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Hel­
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Twenty-fourth
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C h . 165 .
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A p p o i n t e d Un de r S e n a t e J o i n t R e s o l u t i o n Np. 7 t o
I n v e s t i g a t e S t a t e A u d i t o r ' s ' O f f i c e a s' t o t h e A d m i n i s ­
t r a t i o n o f t h e S t a t e I n s u r a n c e Ac t and t h e A d m i n i s t r a ­
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27-30.
138
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i 960.
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Public
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o f Sc hool B u s i n e s s O f f i c i a l s .
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Insur-
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Insur-
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Ratified
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1967.
Bi smar k:
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( Sept ember, 1 9 6 6 ) , 38- 40 e
Total
XXXI X
P e n t t i l a , W i l l i a m A.
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Hel ena:
Mont a na
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P e n t t i l a , W i l l i a m A.
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Fire Marshall, I 967.
Report.
Helena:
Mont a na
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P e n t t i l a , W i l l i a m A.
Annual
F i r e M a r s h a l l , 1968.
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Helena:
Mont a na
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ance, 1966.
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R a l e i g h , No r t h
D i v i s i o n of I n s u r ­
R.
" P a y i n g Too Much f o r F i r e
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42-44.
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Pr oper ty in M i c h i g a n . "
Unpublished Doctor' s d i s ­
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Busi ness O f f i c i a l s ! "
Bul l e t i n No. FIT.
Evanston, 111.:
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M a n a g e m e n t , I ( D e c e mb e r , 1 9 5 7 ) , p p . 2 8 - 6 7 .
The
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”
S t a t e Insurance Fund.
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Mo n t ­
Mont ­
State Insurance
Annotated.
Fund.
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" T h e We e k l y
U. 5 . A . ,
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December I , 1 9 6 9 , p . 7 9 .
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Affairs,"
State
1969.
Education
Insurance.
MONTANA STATE UNIVERSITY
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