UNITED STATES DEPARTMENT OF AGRICULTURE 



BULLETIN No. 530 



Contribution from Office of Markets and Rural Organization 



CHARLES J. BRAND, Chief j&^^Ji* 



S^J^^mTU 



Washington, D. C. 



V 



May 8, 1917 



THE ORGANIZATION AND MANAGEMENT OF 

 A FARMERS' MUTUAL FIRE INSURANCE 

 COMPANY. 



Ey V. N. Valorem, 

 Investigator in Agricultural Insurance. 



CONTENTS. 



Introduction 1 



Purpose of the company 2 



Business territory 3 



Membership and voting privilege 3 



Board of directors 5 



Officers and committees 6 



Applications for insurance 8 



Inspection of risks 10 



Form and term of policy 10 



Limiting the size of individual risks 11 



Evils of blanket insurance 12 



Liability of the company and of the insured . . 13 



Reduction and cancellation of insurance 14 



Fees and assessments 15 



Classification of risks 16 



Settlement of losses 17 



Reserve 18 



Amendment of by-laws and articles of incor- 

 poration 18 



Suggestive organization and business forms. . 19 



INTRODUCTION. 



Farmers' mutual fire insurance companies represent one of the most 

 successful efforts at rural cooperation in the United States. Nearly 

 2,000 such companies are in existence, with a total amount of insur- 

 ance in force exceeding o\ billion dollars. These companies are 

 increasing rapidly in number and size. In some States of the Middle 

 West fully three- fourths of all insurable farm property is now 

 insured in the farmers' own companies. Organizations of this 

 kind are found in every State except Florida, Mississippi, Louisiana, 

 New Mexico, Arizona, and Nevada. 



The organization of a farmers' mutual insurance company should 

 be preceded hj a certain amount of preparatory work. The legal 



Note. — This bulletin is intended mainly for two classes of readers — those contem- 

 plating the organization of a farmers' mutual fire insurance company and those desiring 

 to improve the methods and practices of an existing company. It aims to outline 

 principles and methods developed by successful companies of this kind and to set forth 

 the advanced ideas held by their officers, rather than to discuss the subject theoretically. 



78934°— Bull. 530—17- 



