22 DEPARTMENT BULLETIN 912. 



well to more than one piece of land, or that the insured may other- 

 wise either carelessly, or with intent to defraud, make misstatements 

 in regard to the insured crop or the damage suffered thereon. These 

 phases of the moral hazard are, therefore, guarded against in the hail 

 policy as well as in the fire policy. 



Because, in the case of hail insurance, the insured can not himself 

 bring about the contingency insured against, slight consideration, as 

 a rule, has been given to the question of overinsurance. While a 

 maximum has almost invariably been fixed by each company on the 

 amount written per acre, concurrent insurance purchased from other 

 companies has until recently been given little attention. Hence, in- 

 stances have occurred in which individuals have taken out insurance 

 in several different companies on the same crop, making the total of 

 such insurance greatly in excess of the value of any possible harvest 

 from the acreage in question. Such a practice may, of course, be 

 characterized as gambling in hail insurance and is no more to be 

 defended than gambling in any other field of human activity. 



Unless the locality in question happens to be peculiarly susceptible 

 to hail and the premiums have not heen adjusted to meet such condi- 

 tions, the gambler in hail insurance is, of course, playing with a die 

 heavily loaded against him. With fair " luck," however, it has been 

 possible for individuals operating on this plan to pocket occasional 

 winnings. Especially was this true before cooperation in the adjust- 

 ment of losses came into practice among many of the larger writers 

 of hail insurance. 



The maximum amount of hail insurance per acre written by the in- 

 dividual company has been increased in recent years in response to 

 the higher value of farm crops. While formerly $8 or $10 were 

 common limits, nearly all companies operating in the Middle West, 

 where the bulk of the hail insurance is carried, now write a maximum 

 amount of $12 per acre on cereal crops grown on nonirrigated land 

 and $25 per acre on the same crops grown on irrigated land. In some 

 of the Eastern States $20 per acre is written on cereal crops by indi- 

 vidual companies even though such crops are grown by the ordinary 

 method. In the case of cotton such maximum usually ranges from 

 $20 to $30 per acre, and in the case of tobacco and other crops requir- 

 ing a considerable amount of hand labor, it reaches $100 or more per 

 acre. Relatively little hail insurance has hitherto been written on 

 truck or orchard crops and no fixed standards as to amounts per acre, 

 or in many States even as to rates, appear to have been agreed upon 

 by the companies. 



While the hail insurance companies have thus placed a limit on 

 the amount of insurance that they will individually write on a given 

 acre, which limit is well within the probable value of the crop, con- 

 current insurance was formerly, as above stated, permitted to any 

 amount desired by the insured. At present, however, most com- 

 panies in the case of nonirrigated cereal crops prescribe a limit of 



