16 BULLETIlSr 1043, U. S. DEI^ARTMEISTT OF AGRICULTURE. 



INSURANCE BY CONTRACT. 



Tables 1, 2, and 3 give some idea at least of the extent of the 

 hazards and the losses to which the producer of crops is exposed. 

 Many of these hazards may be reduced or even eliminated by the 

 principles of self-insurance already mentioned. Even after this is 

 done, however, there remains a large element of risk in the pro- 

 duction of crops which can be adequately cared for only by a 

 reliable contract for indemnity, or, in other words, by insurance 

 in the technical meaning of the term. 



The only insurance hitherto generally available for the risks or 

 hazards in crop production has been that of hail insurance, and even 

 this form of coverage is of relatively recent origin. Hail insur- 

 ance on growing crops has grown during the last decade into a 

 business of some magnitude. The total premiums for 1919, which 

 marks the highest point yet reached, exceeded $30,000,000. More 

 than half of these premiums were collected by joint-stock fire in- 

 surance companies, about 60 in number, which write hail insurance 

 more or less as a side line. The remainder was divided almost 

 equally between specialized hail insurance companies doing busi- 

 ness on the mutual plan and State hail insurance funds or depart- 

 ments. The total risks covered amounted to about $560,000,000. 

 Almost one-half of these risks was carried by the joint-stock com- 

 panies and the other half was divided equally between the mutuals 

 and the State departments in North Dakota, South Dakota, Montana, 

 and Nebraska.^ 



A certain amount of fire insurance has also been written on stand- 

 ing grain in some States of the West. This form of insurance is 

 most common in districts where large acreages of wheat are left 

 standing until thoroughly ripe and dry and then cut and thrashed 

 in a single process. The insurance takes effect on the grain in the 

 field and as a rule follows it until it is sold or stored in a commercial 

 elevator or warehouse. 



In recent years attempts have been made to work out a more gen- 

 eral plan of insurance coverage for farm crops. The first attempts of 

 this kind were made in 1917, when three joint-stock fire insurance 

 companies offered crop insurance in North Dakota, South Dakota, 

 and Montana. Two of these companies wrote practically identical 

 contracts and the contract of the third differed but little from the 

 others. A brief outline of the leading features of the plan follows. 



The insurance covered all the hazards to which crops are subject, 

 with the exception of fire, floods, winterkill, and failure on the part 

 of the farmer properly to till and care for his crops. The hail 

 hazard was specifically included in the coverage offered by this form 



1 U. S. Dept. Agr. Bull. 912, " Hall Insurance on Growing Crops in the United States," 

 p. 11. 



