The Nonpartisan Leader Newspaper, September 15, 1919, Page 3

b4 'l 5 - VOL. 9, NO. 11 gz small expense. .ance Commissioner S. A. Ols- . the state is embarking on be- -rather than private profit, " there is no taint of bureau- -In the interest of a square deal for the farmers Tonnariib Official Magazine of the National Nonpartisanv League Teoder A n'mgazine that dares to_ print the truth ST. PAUL, MINNESOTA, SEPTEMBER 165, 1919 o~y WHOLE NUMBER 208 The Test of ‘the Hail Insurance LaQV—_ Cost of Policies Cut One-Half in Most Disastrous Year in North Dakota ‘History—T'welve Thousand Claims Received by State Department Bismarck Bureau, Nonpartisan Leader. . RIVATE .insurance companies’ * boasted superiority over the state in the insurance business has been effectively disproved by the experience of North Da- hail losses- under a law that was. designed really to insure the people, instead of furnish- _ing merely campaign material. The success of North Dakota’s hail ihsurance de- partment explains why it i§ that insurance companies : have raised huge slush funds to fight the Nonparti- san league. The state, through the greater efficiency which it has proved itself to possess in competition with private competitive organi- zations- with their great ex- penses and necessary profits on millions of stock value that is pure water, has cut hail insurance rates in what probably was. the most dis- astrous year in the history, of North Dakota just one-half. Liberal estimates at the department of insurance out- line the situation as follows: Hail insurance will. have cost the insured 35 cents an acre, including the 3 cents an acre tax levied on all tillable land, whether the' grain grower elected to come under the provisions of the law or not. The same-insurance—a maximum of $7 an acre— would have cost the insured 70 cents an acre with the cor- porations. The administration of' the department is carried on at The cor- porations in the insurance business can not avoid these expenses, which must be passed on to the policyholder. Adjustments under the state plan are more" rapid and cost less. The average expense of each adjustment to the North Dakota farmer will work out, it is estimated at the department, at from $2 to $3, whereas under the private insurance com- panies’ plan, adjustment - expense for each policy- holder will average be- tween $5 and $8. WORK IS DONE ON BUSINESS BASIS The hail insurance depart- ment at the state capitol is under the direction of Insur- ness and Thomas Sheehan, manager. Not unlike the * . other enterprises upon which half of serving the people ‘cracy in the workings of the institution. =~ - LeRd kota after the first season of V72 ‘ The two laws in North Dakota which probably Only a few clerks are required to handle the business, and the overhead expenses are extra- ordinarily light.. But even those expenses are not charged up to the taxpayers, as the legislative ap- propriation of funds with which the state was to enter into the hail insurance business was made with-the idea that the money was a loan, to be re- paid out of the returns from the policyholders. What has happened, then, is that the grain grow- er of North Dakota has become a privileged :mem- ber of a vast mutual organization, which has back of it the stability of the state and the lower rates needed because of the fact that the expense.is spread among so many participants. ? ‘Aside from the acre tax of 3 cents, this insur- " ance means no burden upon the taxpayer, but those * NO WONDER HE SMILES! —Drawn expressly for the Leader by W. C. Morris. more than any of the others come close to the peo- ple of the state, already have proved their value, although they have been in operation only a short time, - One of these laws is the workmen’s compensation- act, which recently paid a claim 24 hours after it was filed. 'Now farmers of the state who have been hailed out this season are - realizing the benefit of the hail insurance law. i ever before, the premium will amount. to about half of the premium on .old-line hail Ainsurance. No wonder the North Dakota farmer is wearing a smile! Although the losses this year are heavier than who benefit by it pay for it. The system of ac- counting has been simplified. There is no red tape in the office of the commissioner and- Mr. Sheehan. And ‘the one idea that predominates in the small group of employes that handle this end of the peo- ple’s business is that of public service. . As it happened, the first year of effective hail insurance in North Dakota also was one of many storms which hit the crop the hardest in years. More than 12,000 claims of losses have been received by the department. The total loss in the state from hail will be more than $3,000,000, with some claims ranging as high as $3,000 and $4,000. The exact amount which will be assessed to those who carried the state “protection” has not been computed, nor will it be until the final claim has been ad- justed. But.exercising a wide latitude in the possible size of -claims yet to be adjusted, Mr. Olsness and Mr. Sheehan are agreed that 35 cents an acre will be a fair assess- ment. This figure may be slightly changed either way, but there is not much prob- ability that. it will be higher. Last week it was estimat- ed that the average loss of the more than 12,000 report- ed would be-in the neighbor- hood of $225. ECONOMY USED IN ADJUSTMENT PLAN The idea of economy has, not been overlooked in build- ing up the adjustment sys- tem, one of the expenses which seems to have hit the farmer particularly hard un- der the system of private in- surance. The state was di- vided into four districts, with a deputy in charge of each. In each of these districts there are from 40 to 50 spe- cial adjusters, or nearly 200 in the state as a whole. " on a basis of $56 a day and expenses, -whereas the cor- porations in the hail insur- ance business allow their This is one explanation of the fact that adjustment costs under the state plan are so much lower than un- der the private indurance sys- tem, but the fact that the adjusters are convenient to the locality in which they work also has resulted in settlements. Even the state can not be in the insurance business _without some complaints. It is only human nature that a man who has seen his entire a storm of a few 'minutes should sometimes feel that perhaps he should have ob- men $10 a day and expenses. - season’s labor wiped out in- tained more than the adjuster: allowed. = These complaints,: (Contim_led on page 14) : i 3 -The special adjusters work - ' greater speed in reaching |