20 DEPARTMENT BULLETIN 912. 
ritory an average loss experience or less. This may be done, of course, 
by a proper addition to the rate of assessment over and above what 
is found necessary to meet losses and expenses of operation during 
the favorable year. In the States where the laws governing mutual 
companies do not permit assessment mutuals to follow the plan above 
outlined, such laws should be amended in the interest of better in- 
surance and of a higher degree of stability among the companies. 
It is encouraging to note that the hail mutuals are to an increasing 
extent recognizing the principle above set forth. Complete figures 
for the reserves of these mutuals are not available, but 10 of the older 
and larger hail mutuals now doing business had a total of surplus 
or reserves at the end of 1918 amounting to nearly $920,000. 
CHARACTERISTICS OF THE HAIL INSURANCE CONTRACT. 
The characteristics of the hail insurance contract are perhaps most 
easily brought out by a brief comparison with the more familiar fire 
insurance contract. While the hail policy, as well as the fire policy, 
is generally considered a contract of property insurance as distin- 
guished from life or casualty, there is a fundamental difference in the 
nature of the property covered by the two policies as well as in the 
hazards against which insurance is written. 
Fire insurance is written, as a rule at least, on material things of 
value which are already in existence, such as buildings, stocks of mer- 
chandise, household goods, live stock, and various other forms of 
tangible wealth. Hail insurance, on the other hand, is written on 
growing crops which represent goods in prospect rather than goods 
in existence. In fact, the latter form of insurance expires almost 
coincident ally with the transformation of prospects of wealth into 
actual wealth, consisting of useful or marketable products. 
While fire insurance is generally written for a specified period of 
time, hail insurance covers, as already intimated, the period or stage 
of development of crops. Most hail policies, to be sure, stipulate that 
the liability of the company shall definitely cease at a specified time, 
which, for most of the territory in which hail insurance is written, is 
noon on September 15. Other stipulations in such policies, however, 
provide that the company ceases to be liable as soon as the grain or 
other crop has been " cut or picked." Since the hail contract usually 
takes effect 24 hours after the signing of the application by the pros- 
pective insured even though the policy may not yet be executed, and 
terminates with the process of harvesting, it follows that in the case 
of the more common field crops other than corn left to mature on the 
root, the term for which the insurance is in force is measured by the 
period elapsing between the da} T following the date of application for 
such insurance and the date of harvest. Xo difference in the premium 
charges is made, as a rule, either because of the lateness of .the date 
at which the insurance takes effect or the early maturity and conse- 
quent early harvesting of the insured crop. One risk may remain 
