CHAPTER XIII 



INSURANCE 



IN the insurance of his dwelling and other farm buildings, the 

 farmer is in the same position as any other owner of buildings. 

 This risk is very commonly carried by a farmer's cooperative 

 insurance company, or a joint stock company, a large number of 

 which do business in each State and are subject to the laws and 

 supervision of that State. 



But the growing of crops and of live stock place on the farmer 

 a risk peculiar to the agricultural industry. Insurance in 

 these fields has developed in three general forms, namely, the 

 joint-stock company (the ordinary corporation), the mutual 

 company (a cooperative enterprise), and, in recent years, 

 State insurance. 



The joint stock companies have long occupied most of the field. 

 Yet discontent with this form of insurance is steadily growing 

 among the farmers. The chief criticism seems to be, not that 

 these companies have failed to pay their losses, not that they have 

 been unduly harsh in their methods of adjustment, but that they 

 have collected too large a toll from the farmer. These com- 

 panies reply that their charges have been fair considering the 

 service rendered and the coverage afforded, and that they have 

 collected no more "toll" in good years than was needed, on 

 business grounds, to build up a safe and adequate reserve against 

 the bad years. 



Farmers' mutuals, coming into the field, commonly use the 

 assessment method of paying their losses. Where they have 

 tried a level premium plan, they have committed the error of 

 making it too low, and hence of having heavy unpaid losses in 

 bad years. Where the assessment plan has come into use, as it 

 has very widely, it often operates under two handicaps : the area 

 covered is too small, placing in consequence too much risk on 

 each member; the volume of business is small, making an over- 

 head expense too high. A mutual company operating over an 

 entire State, with risks well distributed, and having a large volume 

 of business, is able to carry insurance to the farmer at actual 

 cost, including, of course, a small overhead expense. But there 

 are no dividends to be declared. 



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