REPORT OF THE SUBCOMMITTEE 271 



be sufficiently liberal in its scope to cover all forests, no matter how- 

 large or how situated with respect to markets. It should also eventu- 

 ally cover other forms of hazard, although fire insurance should first 

 be taken up, and other forms of insurance can be added later on. It 

 appears extremely desirable, then, that forest insurance beconne estab- 

 lished as a distinct business, organized on a very large and a very 

 liberal basis, rather than a subsidiary department of a regular fire in- 

 surance business. 



Reasons for Slow Development of Forest Insurance 



That a general system of forest insurance against fire, at least, 

 has not been in effect long ago in the United States is due probably 

 to two principal causes : First, there has been no definite knowledge 

 as to the hazard involved, but rather a grossly exaggerated idea of the 

 costs of such insurance. Much has been said and written about the 

 enormous total annual forest fire loss, but the distribution of this 

 loss and its relation to the total values involved are not so well under- 

 stood. Old line companies which have written a few policies on timber 

 have charged premiums of from 2^ to 5 per cent per annum — rates 

 which are of course entirely too high for a forest owner to carry, and 

 are out of all reason considering the hazard. Even less is known about 

 hazards from other causes than fire. Second, reasonable standards of 

 protection against fire or other harmful agents have neither been 

 generally enforced by law nor adopted voluntarily by owners, except 

 in a few rather limited regions, and there only comparatively recently. 



Action Necessary to Make Forest Insurance Practicable 



To make a nation-wide program of forest fire insurance practicable, 

 action along these lines is necessary : 



1. Steps should be taken to insure complete and accurate reports of 

 all forest fire losses in all parts of the United States. These reports 

 should be uniform in character, and should give all the information 

 needed for classifying and rating risks. It will also be necessary to 

 have fairly accurate classified estimates of the total forest values sub- 

 ject to risk. The Federal and many State Governments and several 

 private protective associations already do obtain rcjiorts on fires occur- 

 ring within their respective jurisdictions, but these reports are by no 

 means uniform in the information called for, are far from complete, 

 and in many instances very inaccurate, especially in estimates of the 

 amount of damage done. 



