5. Minimum rates.—Rates are minimum and spe cific. A minimum rate applies to a large group of properties such as dwelling houses where the hazard, or risk, as it may be better understood, is uniform in its character and does not vary much in extent. Min imum rates apply to groups of properties which the underwriter finds he may safely insure without the expense of a specific inspection and the specific rating.
Stores and dwellings, including dwellings above the :/ stores, also come under the minimum rates, provided the stores are occupied by a business of a very mild hazard such as dry-goods, groceries, drugs.
6. Specific rates.—A specific rating applies where a business, or some operation in it, deemed to have a risk attached. The underwriter goes to greater ex pense, exercises more care, and an inspection is made by the rating organization and a rate promulgated. The risk in question may be a property with a dwell ing above and a store underneath, but the store may be devoted to the sale of furniture, a kind of stock which furnishes the very best of fuel for a fire, with the result that there is usually a heavy damage. In such a store, too, there are usually oils, paints and varnishes, all highly inflammable.
7. Schedule rating.—A property in which there is any risk at all owing either to its business or size, should be subjected to a very close analysis of all its features. This analysis is made by means of a tool called the schedule. What enters into a schedule can be seen from the case of theaters and churches. These properties are erected for certain definite and specific purposes. Both are distinguished by large auditoriums, a condition which greatly facilitates the spread of fire once it has started. Schedules for these types of properties always take the life-hazard into consideration to some extent, altho primarily the fire underwriter is not charged with responsibility for that feature of a property. Let us take a theater for a closer analysis of this type of risk. The modern theater is divided into three divisions: the stage, in cluding all that part of the theater which is behind the proscenium wall; the auditorium where the audience assembles ; the entrance which includes the ticket and general offices, and possibly some other features. After the great Iroquois Theater fire in Chicago, a special study of the design of theaters was made and the effort is now to separate these three parts so that a fire, originating in either the entrance or stage por tions, may not be communicated to the auditorium and so endanger the audience. The same would be true in regard to a church property where the activities conducted in connection with parish houses are prominent. Such parish houses are frequently at tached to the church building without standard sepa rations. Schedule rating splits the rate into parts in stead of providing a flat rate, which was a practice for many years. A schedule may make a uniform rate, but one divided into many parts, charging for this defect and crediting for that superior condition. This system of charges and credits shows the property owner where he has fallen below the standard, and where he has reached it.
8. Universal mercantile schedule.—There are two schedules which have been very successful in the at tempt to make a uniform method for all properties of a given class. One is the universal mercantile schedule. It was published in complete form in 1893 after it had received the benefit of the criticisms brought forth by some six previous editions. The essential' features of the schedule are as follows: (1) The key rate which is based wholly on the general conditions of the town or city. It considers all that is within the jurisdiction of the people them selves, covering everything from the water supply up to the paving of the streets, the police force, etc. This is measured by a certain standard and the key rate is fixed accordingly. (2) The build ing is then analyzed as to walls, height and area, and these are measured by a standard building. For example, a standard building is not supposed to be more than four stories high, since the fire department cannot fight a fire to advantage above that height, hence a charge is made for the additional stories. Good features, which differentiate the property from ordinary buildings, such as extra heavy beams and timbers, first floor, fireproof, etc., receive credits. (3) The occupancy of the building is then analyzed. The schedule includes a list of occupancies which in the beginning numbered over 1,200. In actual practice it has been expanded by 600 further items. The analy sis of the occupancy of the building is divided into two parts. The first embraces two features, the risk or hazard and combustibility, while the second part measures the susceptibility to damage. The stock may not be a very dangerous or combustible stock, but it may be very susceptible to damage. Milli nery, for instance, represents such a stock. It will not of itself start a fire very quickly; but will burn rapidly and, owing to its very light nature, it is highly susceptible to damage from smoke, fire or water. (4) The fire-fighting appliances of the risk are then considered. These include water pails, watchman's service, special alarms and perhaps sprinklers. Certain features of location may be con sidered, as where a building stands on a corner so that a fire.may be fought from two sides. All these points help to constitute a property as a favorable risk. (5) The exposure of a building is the next item taken into consideration. This means the danger of fire from the surrounding property. The next classi fication includes items which are called faults because they need not exist. They mean unsafe stove pipes or heating conditions, untidiness, improper care of waste cans and all the numerous things which are called in business properties, bad housekeeping. For these the underwriter will make fairly stiff charges. They are placed last in the rate as they can be easily corrected when called to the attention of the inter ested parties. They can then be taken off without recomputation of the whole rate.