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The Fire Relief Association of Wayne County
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1877 |
History |
1977 |
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Necessity is said to be the mother of invention
and cooperative insurance had such a mother. A century ago fire was the
scourge of the farmer's life. There were no fire engines carrying their
own water supply and speeding over allweather (sic) roads to battle farm
fires. The only defense was a bucket brigade manned by neighbors who could
not be summoned quickly by phone, for there were no phones, and who had to
come by horse over dirt roads. Thus most rural fires were total and a real
disaster to the family involved.
The hazards were high also. Lighting was done by candles or kerosene
lamps. Heating was by fireplace or woodstoves. Chimney fires were common.
Given these circumstances it was not surprising that the fire insurance
companies of that day either refused all rural business or charged a
premium higher than the farmer could afford.
If necessity was the mother of cooperative fire insurance, the Grange was
it's father. Founded a little over a century ago, the Grange had as its
purpose the improvement of the life of the American farmer. Farm fires
were among the earliest problems it tackled. The answer was surprisingly
simple. The farmers would insure through a local cooperative insurance
company. If one had a loss, the others would be assessed proportionately
to reimburse the unfortunate member.
During 1877 the question of a local assessment fire insurance association
for Wayne County was widely discussed among the Granges of the County. The
result was a meeting held in Rochester by representatives of the Wayne
County Granges. Here the Fire Relief Association was formed with Rowland
Robinson of Sodus as President and A.F. Sheldon of Lyons as Secretary. The
Secretary acted as manager of the Association and the office was in his
home.
Five year policies were written. A small policy fee, paid by the insured
when the policy was written, took care of the necessary expenses. At first
an assessment was made each time a loss occurred. Assessment No. 1, levied
April 12, 1879, covered a $500 loss of Elias Merriam of Newark.
Surprisingly, between 1881 - 1885 no assessment had to be made.
Assessments levied to cover single losses soon gave way to assessments
made at irregular intervals covering several losses. Finally in 1901 the
policy of an annual assessment on October 1 covering the losses of the
past year was established and continued for the next sixty years.
From the records it would appear that for it's first half century the
Association grew slowly but steadily with few major changes. But by 1910
the shadow of coming problems began to appear. The Directors were
discussing the new fangled gas engines, automobiles and tractors and
whether they could be stored in insured buildings without voiding the
policy. Also in 1911 the State Department of Insurance began to require
annual reports to the Department and to make periodic examinations of the
fiscal condition of the Association. The shadow of the long hand of
governmental regulation was beginning to appear.
Nevertheless, the Association made some adjustments to changing conditions
and continued to prosper. The Great Depression hit in the Thirties.
Farmers were so hard up for cash that there was a strong temptation to
"sell" some of their buildings to the Insurance Company. It was
not an easy period to manage an Insurance Association but the Company
weathered the storm.
World War II brought inflation and a great demand for agricultural
products and a shortage of labor to produce them. Thus the mechanization
of agriculture, which had been proceeding slowly since World War I, was
given new impetus. Inflation and more machinery meant bigger risks, risks
that exceeded the legal limit which the Association could carry. To meet
this situation the Association began to reinsure part of larger risks.
Up to this time the Association had no surplus funds but now the State
Department of Insurance required it to build up a reserve fund at least
equal to the average of the losses and expenses for the preceding four
years. Increasingly over the years the hand of the Government has reached
into the office to effect the management of the Association. Sometimes it
touched only small things such as requiring a fourth member on the
Executive Committee or the setting up of a petty cash fund. Other things
were not so minor such as licensing of all Agents, payment of payroll and
income taxes, contributing to a property and liability security fund,
restricting the Association's freedom to cancel bad risks, regulating
claim settlements and numerous others. This is not to say regulation has
been necessarily bad. In fact much has been good but it means an
additional factor which the modern insurance company manager must deal
with.
Other changes were occuring (sic). Demand for broader coverages brought
the additional perils and theft of livestock endorsements in 1953.
Coverage for wind came in 1956. Steady inflation made the values on five
year policies out of date before the policies expired so the policy period
was shortened to three years. In 1961 the assessment period was changed
from a post assessment issued on October 1 each year to an advance
assessment on the anniversary date of the policy. Another significant
change was the adoption of standard forms in 1963. For the first time the
Association's policies were concurrent with those of nearly all the other
insurance companies in the state. Homeowners policies were first issued in
1966 followed by Farmowners, Comprehensive Personal Liability, Farm
Liability and Floater coverages in 1973.
From the time of its inception the business of the Association was
conducted from the home of the Secretary who performed the job as a
sideline to his regular occupation. In 1961 the office was moved out of
the Secretary's home to an office in Clyde. In 1968 that building was
purchased and remodeled as a permanent Home Office.
Starting from scratch 100 years ago, the Fire Relief Association of Wayne
County now has assets of $1,000,000. It has paid the losses of hundreds of
policyholders. Over the years it has adapted itself to the changing needs
of its insureds. It's basic philosophy has always been conservative. With
continued good management and a sensitive response to changing needs, it
should continue serving its constituency for many more years.
Compiled by Walter E. Benning
For the 100th Anniversary
October 18, 1977
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