The Rural Voice, 1981-07, Page 7with a mutual from Tavistock. He pays
5722 annually, about 10 or 15 per cent
Tess than what he paid for insurance on
the century -old barn.
That yearly figure covers about one-
third of his personal estimate of the
barn's value. "It covers the creditors,"
said Dillon, but there is no replacement
cost for his time and labour. "It'll be
another two years before I know whether
it's paid off," he calculated, "but I put
safety first, though. and in that way it's
paid off already. I'm concerned about
fire. Fire scares me. I'm not suggesting
fires are set, but in talking to insurance
agents, there is a small but significant
number of barn fires that have suspicious
causes. And it is just the fact that a good
farmer, a person who has a safe building
and is using good management practices-
- you need both - he's subsidizing the
guys that don't care.
"There are some small breaks. A lot of
mutuals now have old barn/new barn
rates. There's a slight break on insurance
rates. but 1 don't think it's large enough.
Part of the reason I'm bitching now is as a
new pig farmer I can't afford to insure the
barn for full value. The premiums are too
high. and I can't afford them. And there
are a lot of other people like me."
Dillon is in for a shock. One southern
Ontario insurance representative said
not only that the farmer is getting a
bargain on his premium. but also that he
can expect the cost of insurance to go up
soon.
That prediction is from Donald McInty-
re. manager of the Peel Maryborough
Mutual Insurance Company in Drayton.
who earlier this year visited and inspect-
ed the Dillon barn. He bases his
estimation on two factors. The first is
inflation.
The second can be attributed to what
appears to be a recent phenomenon. "We
see more and more small claims." noted
Mr. McIntyre. "Before, when a couple of
sheets blew off someone's roof. they'd fix
it themselves. Now they bring in a local
contractor. More maintenance type of
things are driving the cost factors up."
But while the manager is bearer of
unwelcome news, at the same time he
acknowledges the insurance industry has
been investigating changes similar to
those suggested by Dillon. "1 think
there's going to be more emphasis on
superior structures," McIntyre said.
"There's more interest in this kind of
thing.If you've got a superior kind of
structure, there should be some credit for
it.
"The whole industry is looking at these
things, not just mutuals. It's very
possible there will be incentives. These
people (safety conscious farmers) who
have looked at these things in a long term
way, these guys are going to find
themselves in a better and better position
as we go along because we're just
beginning to look at these structures for
hazards."
Farmers looking for immediate re-
wards on their premiums, however,
would be wise not to get too anxious. Any
changes will take time because of major
obstacles insurance companies see in
their way.
First, before companies can implement
a credit system for safety features, they
have to hire qualified people to handle
inspections. For fire hazards, the most
qualified are electricians but presently
mutuals are inclined to let their sales
agents look over barns. "Inspectors,"
considered McIntyre, "I think this is
great, but that kind of thing we're not
able to implement over night. We will
have our own inspection staff in two years
Right now our directors do it. They're
farmers, though, not electricians."
Whether it is based on remarkable
foresight, or just plain business sense, is
uncertain, but the Formosa Mutual
Insurance Company in Bruce County has
conducted such inspections for 28 years.
"Both my inspectors are qualified electri-
cians," explained Vern Inglis. company
manager. "It provides a free service to
policy holders by pointing out hazards at
no cost. We're one of the few (mutuals)
that has such a detailed system.
"It gives a better knowledge of the
type of risk. A lot of companies use
directors who aren't really qualified. I can
be certain when my men go in.
"1 don't think mutuals, if they continue
to grow the way they are, can help but
hire inspectors. No question about it.
Some of the smaller companies probably
won't. Directors might feel they can do it.
I don't know if 1 accept that." The
facilities of policy holders with Formosa
are inspected every three years.
A second problem, outlined by McInty-
re, is that a rapid inclusion of incentive
packages could create a serious imbal-
THE RURAL VOICE/JULY 1981 PG 5