The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1909-01-12
PERRY DEFENDS
MUTUAL SYSTEM
Of INSURANCE
Continued From Page One.)

premiums enough to meet losses. ex-
penses and dividends on stock, add
ing a reserve, why should not a mutual
company be able without the condagra-
ton hazard to pay dividends to its pol
icy holders? This liability, notwith-
standing statements to the contrary,
is limited by statutory provision.
There have been cases cited where the
liability claimed to be unlimited. but
this was only in the case of farm mu-
tuals, or mutuals organized to operate
in one or two counties, and the statute
pecially provided that it should be
purely partnership affair. requiring
no premium note nor fixing a limit
to the liability. The law under which
these companies are organized is no
more like the law under which the fac
tory or the class mutuals are organized
than is the statute providing for the
organization of a stock company.
Less IS Per Cent Expense.
''The expense account is another
important feature in the management
of an insurance company, and for the
most part today the successful mutual
companies are operating on an average
expense ratio of less than Is per cent.
as against an average ratio in stock
companies of nearly 40 per cent. This
difference, you can readily see will fur
nish a pretty fair dividend to policy
holders. AS in the manufacturing or
mercantile business, wholesale or re-
tail, the success depends almost wholly
on the management. The mutual
companies that have failed have met
disaster by reason of bad management.
While there have been failures among
the mutual companies, there have been
greater number in stock companies,
due, first to bad management, and Sec
ond, to losses in CONGREGATIONS.
No Lawsuit Burdens.
For the most part a mutual com.
pany hones--y and conservatively
managed Is not burdened with law
suits. There are mutual organization
in your own state that have never had
a law suit for or against them in any
court. One company, nearly twenty
years old that has paid over a million
dollars in losses has never had occa
sion to dispute single claim nor has
it had occasion to have a lawyer ap-
pear for it in court. Further. it is the
general policy of the mutuals, particu
| larly factory mutuals, to pay losses i'm
mediately on adjustment without dis
count. They expect premiums to be
paid promptly and feel that the pol
icy holder who meets with loss is en-
titled to as prompt payment.
A Question for Study.
1--WE advocate in every instance g
blanket form covering buildings an(
contents. This, especially in the man
ufacturing line, obviates the necessi
| ty Of following your values from ont
building or department to another ant
being over-insured in certain building:
and under-insured in others. 1t fire.
quently happens that when fire oc
ours the large valuations are where thu
fire occurred and the smallest amour
| of insurance is carried, and, while thu
manufacturer thought he was full.
covered, he is sorely disappointed il
finding that the movement of values
was not watched closely enough. W.
believe the question of form is one tina
should be more carefully studied.
The question of benefits received
from mutual companies is frequentl.
underestimate. There are thousand
Of insurers today that are enjOyini
lower rates from stock companies en-
tirely from the fact that there is mu
tual competition. Where the mutual
do not carry the line, lower rate j
received from the stock company thai
would prevail without competition
Unfortunately for the mutuals, as wei
as the stocks. there are those who
while not eligible to the better elias
of mutual companies, often get i
communication with these same mu
tuals and then present the statement
and their literature to the stock CON
panies, threatening to cancel and plac
their lines with the mutuals if a low
er ratesis not given them. This, we b
lieve you will admit is unfair. Their
are also instances where insurers wi
take mutual policies for q time an
then showing the net cost to tn
stocks, received lower rate from then
cancel their mutual policies and plac
their line with the stock companies
A person of this sort is not entitled t
consideration at the hands OF the mu
tuals or stocks, and of course, if a
were. dishonest. there would soon b
an end of mutual competition. Their
are cases too. where the stock con
panies for fear the mutual companie
will take the business. A more stabl
What Mutuals Accomplished.
policy on the part Of the companie
} have done in the way of fire prevel
ton. you. perhaps, know the so-calle
slow burning or mill construction wa
originated and brought to it's preser