12 BULLETIN 9330, U. S. DEPARTMENT OF AGRICULTURE. 
the total amount of the twe or more policies shall be well within the 
actual value of the property. 
The second plan of sharing liabiity with other companies is that 
of reinsurance. Under this plan the original company in the first 
place insures the entire risk, but later makes a contract with another 
insurance company to assume a certain part of the lability. 
The first of these two plans is the more easily apphed, since the 
two or more companies sharing a given risk are practically inde- 
pendent of one another; hence uniformity in practice or approval of 
ene another’s methods is not required. Under the second plan the 
knowledge and approval of one another’s methods and affairs are 
necessary before an agreement for reinsurance can be brought about. 
EVILS OF BLANKET INSURANCE. 
From the point of view of the company the surance written 
should be as specific as possible. The practice of writing blanket 
insurance, that is, of covering a variety of insurable objects by a_ 
single lump sum of insurance, is unfair both to the company and to 
the members with a small amount of property to insure. It enables a 
member owning a large amount of property to protect himself 
against loss with a relatively small amount of insurance. In extremé 
instances all the personal property lecated on several separate farms 
has been thus covered by a single sum of insurance. Since loss of 
more than a small fraction of this property by any one fire is impos- 
sible the owner, vider such a blanket plan, can protect all his per- 
sonal property by an amount of insurance equal perhaps to 10 or at 
most 20 per cent of the value. .A corresponding opportunity to 
secure more protection than is actually paid for is not open to the 
member who has but few items of personal property and these in a 
large measure subject to destruction by a single fire. 
Inasmuch as under the blanket plan the property covered by the 
insurance is invariably out of proportion to the amount of insurance 
written, it makes the assessment per hundred of insurance unduly 
large, and thus in addition to giving an unfair advantage to the more 
wealthy members, it discredits the work of the company by making 
the average cost of protection appear higher than 1s actually the case. 
A number of the farmers’ mutuals have reduced their rate of assess- 
ment materially, while at the same time they have made their assess- 
ments more just, by the simple method of changing their plan from 
one of giving blanket insurance to one of specific enumeration and 
valuation of the various kinds of property covered by the contract. 
