24 DEPARTMENT BULLETIN 912. 



reduced liability. Such a provision would, in practice, involve con- 

 siderable difficulty, and the necessary adjustments, assuming that the 

 plan were otherwise practical, would add materially to the expense of 

 operation. 



Barring some such additional change in the contract as just indi- 

 cated, there seems to be no reason why the company should have its 

 indemnity payments reduced on the ground that adverse conditions, 

 other than the occurrence of hail, have reduced the value of the in- 

 sured crop. The premium rates are fixed on the basis of the preva- 

 lence of hail in a given locality coupled with the susceptibility of the 

 insured crop to damage from this hazard, and not on the basis of 

 any probability of earlier loss from other causes. From this point 

 of view it would seem that even the provision in the hail contract 

 which denies liability in cases of earlier damage, from causes other 

 than hail, to such an extent that the crop is not worth harvesting, 

 should be coupled with a provision for the return of an appropriate 

 portion of the premium in cases where the company uses its right 

 to deny liability under this provision. 



Where mutual hail insurance companies write a term policy cov- 

 ering specified crops on a given farm, the amount of insurance on a 

 given acre will naturally vary with the total acreage of crops which 

 are enumerated in the policy. The insurance per acre is ascertained 

 under these circumstances by dividing the total amount of insurance 

 or the face of the policy, by the number of acres planted to the kinds 

 of crops which are covered by the insurance contract. Companies 

 writing term hail policies have as a rule the same provision for the 

 adjustment of losses as is in vogue with companies writing seasonal 

 policies applicable to specific crops on specified fields. In a few 

 instances, however, such companies adjust losses on a plan similar to 

 that on which fire losses are settled, paying the actual estimated loss 

 on each acre up to the amount of the insurance carried. 



Provisions in the hail policy with regard to notice of loss, proof 

 of loss, and the payment of the indemnity due are essentially the 

 same as in the fire policy. No liability is assumed, however, for a 

 loss which does not equal 5 per cent or more of the insurance on a 

 given crop, and in case the insured reports a loss representing less 

 than such percentage of the crop he is himself liable for the cost of 

 investigating the claim for indemnity against such loss. This pro- 

 vision appears to be rarely, if ever, enforced. The payment of a 

 partial loss does not terminate the policy, but reduces the liability of 

 the company by the amount paid on such loss. 



SPECIAL PROBLEMS IN HAIL INSURANCE. 



Whether the specific, one-season, hail policy is written, or the 

 blanket term policy, certain peculiar administrative problems enter 

 which are not present in fire insurance. The writing of the former 

 kind of policy gives rise to a strictly seasonal activity, hail insurance 

 rarely being purchased on this plan until after the crop is already 



