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Show Foundation Reports On Fire Insurance Carried By Utah On State Buildings The State of Utah now carries ' more than 200 fire insurance policies having a total cover-1 age of $32.3 million, to protect state-owned buildings and their contents, it was reported in a Utah Foundation study released today. Policies amounting to $19 million were purchased in August, 1946. Coverage was increased in-creased to $19.4 million in 1947, to $25.3 million in 1948. and to the present $32.3 million in 1950, according to the Foundation Founda-tion study. These policies all expire August 1, 1951. Aggregate Aggre-gate premium on the policies purchased during the five-year period amounted to $169,000. The 1951 valuations of state-owned state-owned buildings and contents are estimated in the study at $35.9 million. If these estimates prove to' be correct, state fire . insurance coverage will be increased in-creased to about $36 million in August. The various state agencies agen-cies and institutions are now in the process of making a valuation val-uation for the 1951 insurance purchase. In 1941, the total valuation val-uation of state buildings and contents was $10.9 million, and in 1946 it was 16.3 million. The Department of Finance purchases all fire insurance for the State. Purchases are usually in small policies written for $50,000 to $300,000 each. Only a few policies are for more than $300,000 each. At the present time there are 14 policies for $400,000 to $600,000 each, one for $900,000, and one for $1,500,000. Agents' commissions, amounting amount-ing in most cases to 25 per cent nf the firp insurance premium, are included in the premium ; paid by the State. During the 5- year period ending August 1, 1951, this commission has totaled total-ed about $42,000. If an insurance insur-ance purchase of $36 million is made for the next 5-year period, the premium will be $285,000 and the total agents' commissions commis-sions will be $71,000. Until 1949, the practice of " 'the Department of Finance was to distribute the insurance commission com-mission by designating which agents were to receive the commission com-mission for each policy purchased. pur-chased. The Department now places the insurance with the agents for the various insurance insur-ance companies and these, selling agents retain the commission allowed al-lowed by the company. Under the methods of insurance .purchasing .pur-chasing employed by the State, the primary consideration in determining de-termining who receives the insurance in-surance commission has often been a political one. A problem inherent in the practice of purchasing large amounts of insurance in many small policies is that of working out a program of service to the insured by the insurers and their agents. This might be accomplished accomp-lished by placing some of the responsibility for the state fire insurance program with the state agents' association. Such a plan operates in Logan school district, where the local agents' association maintains a committee commit-tee to review the district insurance insur-ance program and advise school district officials on insurance j matters. Although the State carries many small policies, they are written on a blanket coverage basis so that the aggregate amount of insurance protects the aggregate amount of state property. An "average" or "coinsurance" "co-insurance" clause in State contracts con-tracts provides that in the event the insurance coverage becomes less than equal to the total value val-ue of state property, the State becomes a co-insurer for a portion por-tion of any fire loss. The use of the co-insurance clause enables the State to purchase pur-chase fire insurance at comparatively compar-atively low rates. When this clause is used, however, serious losses may be suffered unless insurable in-surable values of buildings and contents are periodically reviewed re-viewed and state-owned property proper-ty kept fully insured. The Utah Foundation study notes that the premium rate for fire insurance purchased by the State is determined by the Utah Fire Rating Bureau. Rating Rat-ing procedures as well as rate levels are subject to review by the Insurance Division of the State Department of Business Regulation. Rate for the 5-year coverage purchased in 1946 was $6.90 per $1,000 of insurance. insur-ance. With the acquisition of a number of inflammable wooden buildings, the rate has increased until at the present time it is $7,92 per $1,000 for a 5-year policy, |