HAIL INSURANCE ON FARM CROPS. 23 



$40 per acre for such concurrent insurance, including the amount 

 carried by the company in question. For similar crops on irrigated 

 land the prevailing limit on total concurrent insurance is $75 per 

 acre. Should the total concurrent insurance exceed these limits, 

 each company will be liable only for its pro rata part of the maximum 

 amount of insurance permitted. 



The hail insurance contract as ordinarily written is a valued policy, 

 the crop for adjustment purposes being literally valued at the 

 amount of insurance carried per acre. In the case of a total loss 

 by hail the indemnity due is the amount of insurance carried per 

 acre, while in the case of a partial loss the indemnity due is such 

 part of the insurance per acre as the part of the crop lost by hail 

 is of the undamaged crop before the hailstorm occurred. Let it be 

 assumed, for example, that an individual carries hail insurance on 

 his grain in a given company to the amount of $12 per acre and that 

 a hailstorm occurs and damages the crop. The problem of the ad- 

 juster under the prevailing type of hail policy is not that of ascer- 

 taining the actual amount by which the value of the crop has been 

 reduced, but merely to ascertain the percentage of the crop which 

 has been lost by reason of hail. If the estimated loss is equal to 50 

 per cent, or one-half of the crop, the insured is awarded indemnity 

 equal to one-half of the insurance carried, or $6 per acre, while if 

 it is found that three- fourths of the crop has been lost by hail the 

 indemnity is $9 per acre. This holds true, no matter whether the 

 actual value of the crop just preceding the hailstorm is estimated 

 to have been greater or less than the amount of the insurance thereon, 

 provided the crop was not so injured or damaged from any other 

 cause or causes as to preclude a profit over and above the actual cost 

 of harvesting, gathering, thrashing, and marketing. Should it 

 happen, for instance, that one farmer whose field is insured at $12 

 per acre had in prospect a yield valued at $60 per acre, while the 

 field of his neighbor, similarly insured, for one reason or another, 

 promised a yield equal to but $6 per acre, and a hailstorm passed 

 over the two fields, causing a 50 per cent damage, each farmer would 

 receive $6 per acre, or one-half of the amount of insurance carried. 

 One of these farmers would, of course, be paid only one-fifth of the 

 actual loss suffered, or one-tenth of the value of the undamaged 

 crop, while the other would receive twice the amount of his actual 

 loss, or a sum equal to the entire undamaged value of his crop. 



It must be admitted that the practices in hail insurance above 

 referred to violate the frequently quoted principle of insurance, 

 namely, that the contract involves indemnity for actual loss, and that 

 no profit to the insured is contemplated or permitted. On the other 

 hand, it would seem that to limit the indemnity on the basis of the 

 reduced value of the crop preceding the occurrence of hail would 

 give the company an unfair advantage unless provision were also 

 made for the return of a part of the premium corresponding to the 



