HAIL INSURANCE ON FARM CROPS. 17 



for hay or seed are, however, usually insured at the same rates as 

 the grains just enumerated. For barley and rye the rates in most 

 of the States are 2 per cent higher than those shown on the map, 

 and the same is true for corn where protection is desired against dam- 

 age to the leaves as well as to the ear. Tobacco is given a rate vary- 

 ing from about one and one-half times the rates on wheat, oats, and 

 corn in some districts to more than two and one-half times the rates on 

 these cereals in other localities. The rates on cotton are even less 

 closely related to the rates on cereals. In the South Atlantic and 

 the East South Central States the rates for cotton are in general' 

 the same as the cereal rates, and in a few instances even 1 per cent 

 lower. In the West South Central States, on the other hand, the 

 hail rates for cotton are from 2 to 4 per cent higher than the rates 

 for cereals. 



In the extreme eastern part of the United States, as well as in the 

 extreme western part, the rates on fruits and on garden vegetables, 

 including peas and beans, even when raised as ordinary field crops, 

 are in general from one and one-half to two times the rates on cereal 

 crops. In parts of the West South Central and Mountain States 

 these crops may be insured at a rate 2 per cent higher than the regular 

 rate on cereal crops in the locality in question. The latter state- 

 ment holds true for the North Central States also, except that such 

 rates for this part of the country have usually covered garden vege- 

 tables only. 



It is difficult to give any definite figures for rates of premium or 

 assessment of mutual companies, since many of these continue to 

 operate on the assessment plan without the application of fixed rates 

 in advance. Where such rates are actually determined in advance 

 by mutual companies they are usually somewhat lower than the joint- 

 stock rates, although a few mutuals adhere to the commercial rates, 

 returning a part of the premiums in dividends or rebates when the 

 losses and expenses together are low enough to permit of such 

 action. 



Only fragmentary data are at hand for the average expense ratio 

 of the various companies writing hail insurance. Such figures as 

 are available, however, point to an average expense of operation 

 equal to about 35 per cent of the premium. This expense of opera- 

 tion, calculated as a percentage of the premiums, will, of course, vary 

 to some extent with the rates on the business written. Many over- 

 head items of expense will be approximately the same for two poli- 

 cies, each representing a thousand- dollar risk, even though one be 

 written in territory where the rate is 3 per cent and the premium $30 

 and the other in territory where the rate is 12 per cent and the pre- 

 mium $120. Six dollars of overhead expense attached to each of 

 these policies will mean 20 per cent of the premium in one instance 

 and 5 per cent in the other. Hence, to the extent that the expenses of 



