PaK44 



The Illinoit Agricultural Association RECORD 



November 1, 1926 



5(|00 CHARTER MEMB^^S GOAL NEW AU TO INSURANCE COMPANY 



19,328 People Died 

 From Auto Accident 

 . last Year Is Report 



Ten Times As Many Are In- 

 jured and Thousands of 

 Curs Are Wrecked. 



By V. Vaniman 



THt RAPID growth of the auto- 

 mobile industry has been 

 matcl led by a similar growth in au- 

 tomobile accidents. 



More people 

 are killed by the 

 automobile to- 

 day than in any 

 other way, bar- 

 r i n g diseases. 

 The type of ac- 

 c i d e n t that 

 stands out pre- 

 eminently is the 

 personal injury 

 accident. Last 

 year there were 

 y. v.mm.n. 19,828 fatalities 



by automobiles and ten times as 

 . manj more were seriously injured 

 in th > United States. 



N< other form of insurance has 

 had such a rapid development as 

 auto insurance. At close of 1920 

 there was approximately 9,000,000 

 cars registered in this country. Dur- 

 ing ;he same year 424 insurance 

 comianies wrote automobile insur- 

 of some kind, the premium in- 

 being about $185,000,000. 

 Oile person is killed by an auto- 

 mobile rfvery 30 minutes. An acci- 

 dent can happen in the twinkling of 

 of ai 1 eye. 



Accident! Similar 

 F< Ilowing is a typical story of an 

 acci< ent. Out in the country — bad 

 crosj roads — both to blame — one 

 kille i, three injured. Who pays? 

 is worth dollars and cents to 

 your mind at ease and to know 

 hazards of sudden loss have 

 removed. Many people every 

 are confronted with a $5,000 

 or $|l 0,000 liability loss. Every one 

 wanfs to feel whatever they are li- 

 for in case of a serious accident 

 be forthcoming. Members of 

 family or friends driving your 

 should an accident occur, if 

 liable, naturally would be ex- 



ance 

 com< 



It 

 hav« 

 the 

 beer 

 yeai 



able 



will 



your 



car, 



heldl 



hurl 

 Can 



pected to pay. A child at play may 



or fall in front of your car. 



you imagine any picture which 

 would touch the heart of a jury 

 mors quickly than a crippled child. 



automobile owner unprotected 

 by ] ublic liability insurance, by rea- 

 son of judgment against him, loses 

 eveiything he owns. 



May Sue Later 



Eo you know that under the law 

 a p ;rson injured in childhood may 

 sue for damages when he or she 

 reac hes maturity, regardless of prev- 

 ious settlement having been accept- 

 ed >y his or her lawful guardians, 

 'unless settlement is approved by a 

 cou -t of competent jurisdiction? 



1 here are some unavoidable ac- 

 cidi nts. Insurance is the first ac- 

 res: ory. Become a charter member 

 of J I company which will operate for 

 yoi and your own fellow farmers 

 whi have indicated their belief in 

 coo peration by being a Farm Bu- 

 rea i member because they know the 

 far ner has problems to solve. With 

 the increasing number of automo- 

 bil< s, with the trend toward compul- 

 sor^ automobile liability insurance 

 an( with the increasing number of 

 automobile accidents it behooves 

 ev«ry member to think seriously if 

 he should not have his own automo- 

 bil ! insurance company not only for 

 his iself but for the sake of bis fam- 

 ily 



An' Open /^tter from Our President 



For 



considera 



>bl< 



period of time there has been a demand for 

 the lllinoii Agricultufftl Association to furnish automobile insurance 

 to it I members. After thorough investigation and 

 consideration, the Executive Committee unanimous- 

 ly decided that an insurance company be organized 

 to be owned and controlled by the membership and 

 operated exclusively for members of the Illinois 

 Agricultural Association. At a recent meeting of 

 the Farm Bureau presidents, they heartily endorsed 

 the i.ction of the Executive Committee. 



Tl ^ Illinois Agricultural Association is your or- 

 gani: Ation, and you are entitled to the best service 

 it can render, and likewise, the Association is en- 

 titled to your best thought and support. 



The trend toward compulsory liability insurance 

 also a factor that merits your consideration. 

 lEver r Farm Bureau member owning an automobile 

 shou d be vitally interested in automobile insur- 

 ance. Especially is this true with reference to liability protection. 

 It is my opinion tliat you, as a Farm Bureau member, will not 

 only be strengthening your Farm Bureau organization by becoming 

 a charter member and making application for insurance in this com- 

 pany, but that you y^i" 

 your estate. 



Your decision, and 

 how soon the compa ly can start operations. 



ill be creating a protection which you owe to 

 the decision of other members, will determine 



S^-*^^ ^<^L^^5r^ 



Four Classes of 

 Against Fire 



Coverage Offered to Protect 

 Theft, Collision, Public Liability 



To make the insura ice just as 

 simple as possible, so ts to reduce 

 bookkeeping and give tie members 

 the protection needed, four classes 

 of coverage are offered as follows: 

 Class I. Fire and th< ft, property 



damage an( 



Class II. 



bility and ccllision. 

 Fire and the ft, and prop- 

 erty damagi! and public 

 liability. 



Class III. Property camage and 

 public liabi ity. 



Class IV. Fire and th ift. 



Class I is called the full coverage 



policy. It protects th< car of the 



insured and also the in^ired against 



liability imposed by 



damage his car may do 



or persons. 



EXPLANATION OF 



Fire and Theft— It 



standard practice for 



public lia- 



law against 

 to property 



[:OVERACE 



is becoming 

 these two 



forms of coverage to b; written to- 

 gether. With the fire s also trans- 

 portation coverage. T le insured is 

 protected against (1) fire, arising 

 from any cause wha:soever, and 

 lightning; an^^£^ while being 

 transported i'^H^ co nveyance by 

 land or water.^The th !ft insurance 

 protects the insured s gainst theft, 

 robbery or pilferage, jxcepting by 

 any person or persons in 'the in- 

 sured's household or in insured's 

 service or employment. In case of 

 loss from fire, trans )ortation, or 

 theft, the insured will be paid the 

 actual value of the cir. "This will 

 be determined by the insured and 

 the company and in ci se they can't 

 agree provision is made for an ap- 

 praiser to be selected by both par- 

 tits. The cost per cai for fire and 

 theft insurance will be determined 

 by dividing the total osses by the 

 value of the ears insuied. This will 

 give the per cent loss per $100 of 

 value. 



Collision Insui ance 



Collision Insurance — This is to 

 indemnify the insured against ac- 

 tual loss or damage ti his automo- 

 bile by collision with »n object. It 

 covers only collision with movable 

 objects except in cas s the insured 

 in avoiding a coUisior with a mov- 

 ing object, collides with a station- 

 ary object, then he is protected. 

 There are many fact )rs connected 

 with collision insuran :e. It is not 

 fair to other member i of the com- 

 pany to have them p irt with their 

 money to recompense a party who 

 is negligent or careli ss in driving 

 his automobile. Foi example, if 

 the insured goes to sleep driving 

 his car, run off the riad and hit a 

 tree, this might be termed negl 

 gence or carelessness |or both. How- 



ever, if the driver runs into a tree to 

 avoid hitting an individual, he will 

 be protected by his insurance. The 

 cost of this insurance will be deter- 

 mined by classifying the cars and 

 finding the losses that each car of 

 the class should pay. It will cost 

 just as much to replace a fender on 

 an old Ford as on a new one. Fords 

 may be in one class — Dodges and 

 similar priced cars in another class, 

 etc. 



No Deductables 



It is common practice among 

 many companies to have deducta- 

 bles, for example, $20 or $50 or 

 $100 deductable. This means that 

 one must stand the first $20 or $50 

 loss himself. Then the company will 

 pay the balance. The Board of Di- 

 rectors decided that there would be 

 no deductables. Instead the in- 

 sured will receive 80 per cent of the 

 loss damage. 



Property Damage and Public Li- 

 ability — These two types of insur- 

 ance are invariably written together. 



Property Damage — This insur- 

 ance promises to indemnify the in- 

 sured against loss from the liability 

 imposed by law upon the insured 

 for property damage to other par- 

 ties of every description, resulting 

 from the ownership, maintenance or 

 use of the insured's car. The limit 

 of liability of the company is up to 

 $1,000 for any one accident. 



Public Liability — This insurance 

 indemnifies the insured against loss 

 from liability imposed by law for 

 "bodily injuries" suffered, or death 

 caused by the operation of the in- 

 sured's automobile. The company 

 will write the ordinary limits of the 

 public liability policy which is $5,- 

 000 for one person, and $10,000 for 

 any one accident injuring more than 

 one person. 



In determining the basis for pay- 

 ment for property damage and pub- 

 lic liability it is pointed out that a 

 $500 car running 30 miles per hour 

 can do as much personal injury as 

 a $1,000 car running at the same 

 rate of speed'. After examining 

 the loss figures'iof this kind of cov- 

 erage for more than 25,000 auto- 

 mobiles, no justification could be 

 found for basing the cost on the 

 value of the car. Therefore each 

 automobile will bear in equal pro- 

 portion losses for property damage 

 and public liability insurance. 



Many factors are involved in de- 

 termining the proper basis for de- 

 termining : what each automobile 

 should pay for a particular cover- 

 age. The only basis that will eventu- 

 ally stand the test of time will be 

 one that is fair and equitable. 



Launching of New Organization Follows 

 Unanimous Endorsement of Plan on Oct. 8 

 by Farm Bureau Presidents in Chicago 



No Money to Be Collected Until 5,000 Applicants Insure 

 Success of Venture. Company Will Be Owned and Con- 

 trolled By and Operated Exclusively For Members. Farm 

 Bureaus Are Agents. , — . 



A State-wide mutual automobile insurance company to be 

 owned and controlled by and operated exclusively for mem- 

 bers of the Illinois Agricultural Association became a reality 

 following action taken by the I. A. A. Executive Committee 

 and Farm Bureau presidents in joint session on Oct. 8 in 

 Chicago. 



There was no dissenting opinion expressed in this represen- 

 tative meeting. Farm bureau members want mutual auto in- 

 surance but they want it under their own control so that its 

 benefits may be exclusively for the people who are support- 

 ing the movement. 



Investigation Made 



The decision to launch the new 



company came after many months 



of careful con- 



J^^k sideration and 



^^^ investigation by 



^ Donald Kirk- 

 B| \ Patrick, V. 

 ^^ J Vanimon and 

 • / others. It was 

 [^ y not hatched 



k ' overnight. The 



'^^^^^ Association had 

 l^^^fe the choice of 

 _^^| linking its fu- 

 ture interest in 

 •»•■"'■' Ki'kp-*"'"'- auto insurance 

 with a privately-controlled mutual 

 or of organizing its own company. 

 It chose the latter course. 



What does the company offer? 

 How much will a policy cost? 



These are salient questions. 

 There will be no membership fees. 

 The only requirement, is member- 

 ship in the Illinois Agricultural As- 

 sociation. The law states, however, 

 that a premium must be collected in 

 cash in advance. This will amount 

 to $10, and will be known as a pre- 

 mium deposit. At the end of each 

 six months period the member will 

 pay his share of losses and expens- 

 es, and thus restore the premium 

 deposit and renew his insurance for 

 another six months period. 



The policyholder retains his $10 

 interest in the initial premium de- 

 posit. The policy fee is $5, to cover 

 overhead expenses requisite to put- 

 ting the name of the holder on rec- 

 ord. 



Policy Holder Benefits 



The Board of Directors has in ev- 

 ery instance formulated plans hav- 

 ing in mind the best interests of 

 the policy holder. The unused por- 

 tion of the premium deposit will be 

 returned to the policy holder upon 

 cancellation of his policy. Likewise 

 his surplus share, will be returned 

 upon cancellation of the policy. 



There are legal requirements that 

 do not permit the company to guar- 

 antee that this will be done since 

 such promises would create a paper 



liability not permitted by the State 

 Insurance Department. In the same 

 way the earnings on the surplus 

 will be credited to the policy holder 

 regardless of the form of auto in- 

 surance coverage. The surplus share 

 will be a contribution by the mem- 

 bers to the company's surplus to 

 meet the law requiring the company 

 to have five times its maximum risk. 

 The surplus share is $10. The maxi- 

 mum risk of the company will be 

 for public liability, which is for 

 $10,000 in any single accident. The 

 member will get his insurance at 

 the cheapest possible cost. In case 

 he parts with his automobile he will 

 have contributed only $5 to the 

 company beyond the cost of actual 

 insurance. 



5000 Members Needed 



Five thousand Farm Bureau 

 members, who will become charter 

 members, are needed to start the 

 company. No money will be col- 

 lected until the company has the 

 necessary 5,000 applications to be- 

 gin operations. 



The Farm Bureaus will have the 

 agency for the Company. When 

 they secure applications from 10 

 per cent of their members they will 

 be authorized agents. When they 

 secure 20 per cent, they will have 

 their quotas. 



Legal Reserve Company 



The Company is organized under 

 the uniform mutual law of the State 

 of Illinois and is a legal reserve 

 company. The powers of the Com- 

 pany are broad enough so it can 

 write other forms of insurance be- 

 sides automobile. It will not, how- 

 ever, enter the fire, lightning, or 

 windstorm field. 



The company is to be owned and 

 controlled by its members who must 

 be farm bureau members or mem- 

 bers of their immediate families. 



The board of directors will con- 

 sist of 19 men. The first board of 

 directors will be the Executive com- 

 mittee of the Illinois Agricultural 

 Association and its executive offic- 

 ers. Every policy holder will have 

 one vote. 



Fill out this blank and send to 



ILLINOIS AGRICULTURAL 

 MUTUAL INSURANCE COMPANY 



Room 1200, 608 South Dearborn St., Chicago 



□ fntwea^d" becoming} • Charter M.mber of 



The Illinois .Agricultural Mutual Insurance Company which will write 

 automoble insurance and operate for Farm Bureau Members 



Name _ _ 



Address ,. 



Member County Farm Bureau 





Earl 



