The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1922-10-28
MUTUAL FIRE INSURANCE
COMP PANIES IN this STATE
Born Of Farmers Alliance, These Expert
ments in Cooperation Have Saved the
Farmers of South Carolina More
Than Half Million Dollars

(By w. II. Mills. Specialist in Farm
| Credits and Insurance).
The mutual fire insurance COM
panies in business in South Caro-
lima were organized for the most
part in the early nineties-1S99 to
1895. They are the outgrowth of
the Farmers Alliance and the spir-
| it of cooperation which it fos-
tered. Even if the alliance died,
it left in the mind of the farmer
the thought that he could organ
ize to take care of his own busi-
ness, and save money. IN some OF
the counties in South Carolina the
farmers mutual fire insurance
companies practically dominate the
field Of insurance on country prop
erty. They insure against fire,
lightning and windstorm, and in
clude dwelling houses. barns, and
their contents. The limit of In
surance on any building in most Of
the companies is $4,000, so that If
a nice country home is to be fully
protected, additional insurance must
! be carried in an old line company.
Written consent to this additional
insurance is required by some
companies, and should be requir-
ed by all, and given only after an
inspection of the premises. The
cost Of this mutual insurance has
averaged 44.3 cents per 500 of in
surance in force to- the, policy.
holder. The companies operate
both on the fixed premium basis.
and on the purely mutual plan. On
the fixed premium basis, they
charge a rate previously agreed
upon. which varies with the COM
pany, but is as rule from 40
cents to 66 2-3 cents per hundred
dollars of insurance. They collect
this premium in advance without
regard to the amount of reserve al
ready On hand. In this way, these
companies have slowly built up a
comfortable reserve. amply large as
rule, to pay their losses prompt
| ly, as they occur during the year
For instance, the Farmers Mutual
! Insurance association of Darling
ton county had assets on June 80,
1921. of. s21.f74.64; the Ander-
son Mutual Fire Insurance COM
pany of Anderson county hads at
the same time s14.742.S8, and the
Farmers Mutual Insurance com
I,pany of York county had $13,-
i 5T. .f9. The companies on the
purely mutual basis sometimes bor-
row the money to pay losses during
the year, then levy an assessment
lat its close to cover the total Of
these losses and the operating eX-
Fpenses. BY this method, insurance
at actual cost is furnished to policy
holders. In practice, however,
these assessments are SO adjusted
as to leave from $1,000 to $4,000
generally in the hands Of the treas
urer, so that losses can be paid
without resort to borrowing. All
1.-THE companies have the. right to
levy pro rata assessments and have
Ia lien upon the property insured
for these amounts, which can be
legally collected. If there Should
be more damage than usual. the
mutual raises it's assessment, or
levies another, to take care Of it.
i Operating expenses are small.
Usually there is one small Office;
and one, or at the most two, paid
officers, a secretary and manager,
Or agent, who receives from 500
| to $3.50 per month. The total OPP
Grating expenses will not averasc
Is2.000.rto the county. Losses p-sid
vary from 81, 1888 to s12,913, with
an average OF about $4,000 to the
county. Insurance in force aver
ages about s1,500,000. SO that an
assessment Of a half of one per
cent. so cents ON the Sf00. would
yield about $500. These figures
may be taken as normal. A good
county farmers mutual fire insur-
ance association should have insur-
ance in force of not less than ST.
100000. 1t should levy an annual
assessment of not less than one
half of one per cent. and its op-'
Grating expenses should not exceed
$4,000. Should It increase its as
sessment to one per cent. it would
begin in all probability the accu-
mutation Of reserve, which would
enable it in a few years to low
er its assessments, and at the same
time assure prompt payment of all
losses. The beauty of mutual in
surance is that there are no divi-
dends on stock to pay. no expensive
Office buildings to maintain, no
agents whose incomes depend prin-
cipally upon the amount of busi-
ness they obtain. Insurance is thus
provided for the farmer at figure
that nearly approaches actual
cost. The Chester County Farm
ers' Mutual Fire Insurance asso-
cation for the year ending June
80. 1922. had a loss ratio of 81
cents per hundred and an expense
ratio of cents hundred. which
lit met by an assessment of so cents
per hundred. thus carrying 81 cents
per hundred to its reserve. The
association of Darlington county
on the other hand had a. loss ratio
Of 81 cents a hundred amounting
to Sa.160, and yet was able. be-
cause Of good management extend
inc- nue1. a numb her of wears NOT only