16 DEPARTMENT BULLETIN 912. 
In the States of Iowa and Minnesota, however, the mutuals car- 
ried the major part of the total risk, while the same was true for 
the State hail insurance departments in two other of the more im- 
portant States from a hail-insurance standpoint, namely, North 
Dakota and South Dakota. The map further indicates that in the 
State of Michigan all of the hail insurance of which record was 
found was carried on the mutual plan, while in the State of Wis- 
consin all but one-tenth of 1 per cent was carried on the samt plan. 
COST OF HAIL INSURANCE. 
In hail insurance as well as in fire insurance it is, of course, essen- 
tial that the rates of premium or assessment yield a sufficient in- 
come to cover the losses that occur and the necessary expenses of 
operation. In the case of joint-stock insurance companies, it is 
naturally the intention so to adjust the rates that in addition to 
losses and expenses there will be a margin of profit for the stock- 
holders who have risked their money in the enterprise. 
In the early days of hail insurance, as already stated, relatively 
little knowledge of the hail hazard was possessed by those engaging 
in the hail insurance business. It seems that a common rate of 
premium was 5 per cent of the insurance written. The variation in 
the severity of the hail hazard found in different States, as well as 
in different sections of the same State, was soon recognized, how- 
ever, and the rates were adjusted in an effort to make them reflect 
these variations. Kates in Minnesota. Iowa. Missouri, and States 
east and south of these were lowered until a rate of 3 per cent be- 
came fairly general for the more common cereal crops in this terri- 
tory. West and south of the States named, however, rates were 
gradually advanced for succeeding districts, reaching 6, 8, 10, 12. and 
even higher percentages of the insurance written. 
While most of the mutuals started out strictly on the assessment 
plan, a few began operations on predetermined rates. Thus one of 
the Kansas mutuals which is still in the field at first wrote insurance 
anywhere in the State at 4 per cent. After a number of years of 
experience in the business this company graduated its rates accord- 
ing to the losses experienced, until such rates were only 2-| per cent 
for the southeastern part of the State and reached 10 per cent for 
some of the western counties. 
The prevailing commercial rates for the year 1919 are shown in 
figure 5. the figures on this map representing dollars per hundred 
of insurance for the crop season. It will also be noticed that the 
relative heaviness of the shading or crosshatching on the map has 
been made to represent the relative hail rates for the different States 
or parts of States indicated on the map. 
The rates here shown apply mainly to the more common cereal 
crops, namely, wheat, oats. corn. flax, and speltz. Grasses produced 
