16 BULLETIN 530, U. S. DEPARTMENT OF AGRICULTURE. 



notice, little trouble is experienced in the collection of its dues, except 

 perhaps from renters who have removed their insured personal prop- 

 erty to some other State or locality. 



CLASSIFICATION OF RISKS. 



With relatively few exceptions the farmers' mutual fire insurance 

 companies of this country hitherto have charged the same rate for 

 all classes of farm property. In explanation of this practice it may 

 be said that little information has been at hand on which a classifi- 

 cation of the various kinds of farm property could be based. It also 

 has been argued, for example, that while a barn may involve a 

 greater fire hazard than a dwelling, each member, as a rule, owned 

 and insured one building of each kind; hence little injustice "was 

 done by taking the more hazardous barn at the same rate as the less 

 hazardous dwelling. Especialty, it has been argued that the classi- 

 fication of property would involve an undesirable amount of addi- 

 tional work for the officers of the company, particularly for the sec- 

 retary in making out his notices and records of assessments. The 

 amount of insurance on each class of risk would have to be multi- 

 plied by its particular rate and then the sum of these products ascer- 

 tained for each policy, while under the current practice the deter- 

 mination of a member's assessment involves but a single calculation. 



In spite of these arguments, all of which must be admitted to 

 have more or less weight, a reasonable classification of risks is re- 

 quired by considerations not only of justice but also of expediency. 

 There is, after all, a very considerable difference in the nature of 

 the property offered for insurance by different farmers. In one case 

 the more hazardous barn may be worth twice as much as the less 

 hazardous dwelling, and in another case a reverse relation between 

 the two may exist. One farmer insures a large number of live stock 

 and another does not. Still further, experience is bringing out 

 more and more clearly that farm buildings put to the same use are 

 by no means equally hazardous. The material of which they are 

 constructed, the location with regard to other buildings, the ab- 

 sence or presence of proper lightning rods, very -materially affect the 

 fire hazard. In fact, this differentiation of risks with reference to 

 the fire hazard is increasing rather than decreasing as the community 

 progresses from an economic standpoint. While in the past prac- 

 tically all farm buildings were built of wood with shingle roofs, an 

 increasing number of buildings are now constructed of brick or 

 stone, Avhile slate, tile, or metal roofs are even more frequent. The 

 larger commercial companies, and also the larger mutuals that either 

 classify or carefully select their risks, are making increased efforts 

 to secure as risks farm buildings so constructed that the fire hazard 



