Mutual Insurance 313 



ing is situated is partly within and partly without such 

 town, it may include in such insurance any outbuildings, 

 hay, grain, stock, or other farm property on such farm 

 outside such limits." 



STATE MUTUAL ASSOCIATIONS 



The mutual assessment associations, like other co- 

 operative businesses, begin to lose in safety and strength 

 when they attempt to operate as state mutuals or in 

 other large geographical areas. Under these conditions 

 the personal contact and acquaintance of member with 

 member are weakened, the risks cannot have the personal 

 examination that local mutuals give, the powers of the 

 association have to be delegated to employees or agents, 

 the moral hazard increases, and the assessments are likely 

 to grow in number and in size. While some of the state 

 mutuals are successful, their general condition compares 

 unfavorably with that of the local associations. The 

 status of the state mutuals is set forth by Mr. Solomon 

 S. Huebner of the Wharton School of Finance and Com- 

 merce of the University of Pennsylvania, to whom the 

 author is indebted for many of the points of view in this 

 chapter, 1 as follows : 



"Many attempts have been made, usually with un- 

 successful results, to apply the mutual plan of fire insur- 

 ance over one or more states. But these state mutuals, 

 while retaining the objectionable features of the local 

 mutuals namely, lack of assets, small volume of busi- 

 ness, and assessments also lack their elements of 

 strength. The moral hazard is increased as the terri- 



1 " Property Insurance," pp. 60-61, 1911. 



