About three quarters of the purchasers of automobiles pay for them on credit over the course of the following year. The theoretical risk to the sellers has led progressive Walter P. Chrysler to adopt a plan whereby each purchaser of a Chrysler car will automatically receive a fire and theft insurance policy on it. The cost of the insurance is included in the price of the car. Thus not only is the owner protected, but also the maker. The idea has also appealed strongly to the General Motors Corporation, who are said to favor its adoption on their enormous output.
In many states, however, insurance companies are supervised by the state government, insurance salesmen are licensed. In New York State especially is this the case. Mr. Chrysler’s plan leaves it to the automobile salesmen indirectly to sell insurance, thus cutting into business formerly sought and held by licensed local companies. The practice also nullifies the power of state insurance supervisors. Accordingly, in New York State, both the State Superintendent of Insurance and the local insurance companies are up in arms against Mr. Chrysler’s scheme.
The State Superintendent has already ruled against it, while prominent New York insurance brokers and underwriters protest on the ground that it deprives the insuring public of the privilege of selecting the insurance company and the terms under which the contracts are written.
The Chrysler Corporation’s insurance is to be handled by the Palmetto Fire Insurance Co. of Sumter, S. C. If it were split up among other companies, much of their present opposition would probably disappear.
