In taking a fire risk, the companies base their estimates on tables as carefully worked out and from experiences quite as well studied as those of the actuaries of life companies.
Fire companies are purely business corporations, and their conduct is subject to the inspection of the officials of the state from which they receive their charters.
PREMIUMS
As life companies have rates dependent on the age of the insured, so fire companies regulate their premiums by the location and other circumstances of the buildings; in other words, they calculate the probabilities, and charge accordingly.
There are buildings particularly subject to combustion on which American companies will not take a risk. Among these may be classed kerosene and turpentine stills, sulphur and powder mills, and the buildings in which these products are stored.
Buildings not used for the purposes named, but in close proximity to them, are often considered too dangerous to warrant the issuance of a policy.
In all cases, the company makes a careful survey of the property to be insured, and on this report the amount of the premium is based.
Premiums on fire policies must be paid in bulk and in advance.
Policies should be renewed some days before the expiration of the old ones.
Fire premiums, taking into consideration the amount to be paid, are much lower than life premiums. We know that a man must die, but a building may never burn down, therefore the risk is less.