Farmers Home Insurance Company celebrates 125th anniversary
By Natalie Reidford
In the business world, longevity is always something to be proud of. Staying in business for decades, or centuries, means the company not only offers a product that the public needs, but has also provided a level of quality and service that sustains the business.
One such local business is The Farmers Home Insurance Company, which opened in Knox County in 1895. Here’s the math: they’re commemorating 125 years in business this year.
Insurance companies have been around for a long time, but what made Farmers Home different is that it filled a need the other companies would not.
Insurance protection for rural properties did not exist in the late 19th Century. Rural properties were just too much of a risk because they were too far from town. In the event of a rural fire, for example, a horse-drawn fire truck would not make it in time to extinguish the flames before significant damage befell the property.
Farmers took matters into their own hands. Groups organized to form assessment mutuals, companies owned by their policyholders.
“They were charged a small premium based on the amount of insurance they bought, and they were assessed an additional amount if the company’s losses were greater than the amount of premium the company took in,” said Doug Steele, Farmers Home secretary and manager. “Directors were members or policyholders, and in the early days, inspected the properties and settled the claims.”
Farmers Home officially opened for business on Aug. 1, 1895. The first customer that day was Monroe Kirk from Harrison Township. He insured his house for $275, barn for $80, grain for $50, household property for $75, smokehouse for $50, more grain for $60, hay for $20 and farm implements for $50.
His annual cash premium for this $660 in insurance coverage was a whopping $7.36.
Five years later, Farmers Home had 100 policies in place, which grew to 300 by the time it celebrated its 10th anniversary.
“Sometimes cooperative farmers worked together to help each other with repairs or rebuilding after a loss. The company paid for the materials, and neighbors got together to rebuild a member’s barn or house,” said Steele.
“It’s fair to say in the early years mutual companies like Farmers Home were run from the manager’s home,” said Steele.
Quarterly and annual meetings took place in the Vincennes courthouse until the 1960s when they moved to First Federal Savings and Loan.
“Then in 1971 the company moved board meetings to the office of Don McCormick, on his farm in Johnson Township,” said Steele.
McCormick joined Farmers Home in 1959 as an agent to help his uncle, manager Ray Bobe. A year later, McCormick went out on his own, opening McCormick Insurance. He wrote for Farmers Home and other companies like Indiana Farmers Mutual.
Bobe retired and on Jan. 1, 1972, McCormick took over as manager of Farmers Home.
“The company remained on the McCormick farm until the fall of 1987, when they moved to the present location at 1115 Weed Lane,” said Steele.
“Both Farmers Home and McCormick Insurance Agency are operated out of this location. Don was affiliated with Farmers Home for nearly 50 years, as agent, manager and director, until his death in December 2017,” she added.
In 1993, Doug Steele stepped in to become secretary and manager of Farmers Home and to join McCormick Insurance Agency as partner. Lee Tuggle is an agent and McCormick Insurance partner and Louis Murphy is an agent.
Lesa Dreiman, an employee of more than 40 years, handles the policy processing.
“Lesa started with Don McCormick when the company was still housed on his farm,” said Steele, adding that Dreiman is “a dedicated, knowledgeable fixture in the company and agency.”
Changing with the times
“About 75 years ago, Farmers Home began purchasing reinsurance to protect the company in years of large losses such as tornadoes or other large wind or hail losses,” said Steele. “With reinsurance, a company cedes or spins off part of its risk and premium to another company. The purchase of reinsurance made the assessment of policyholders unnecessary and helped protect the financial stability of the company.”
Today, the reinsurance company for Farmers Home is Grinnell Mutual Reinsurance Company of Grinnell, Iowa, which reinsures nearly 300 farm mutuals.
“The biggest concentration of farm mutual insurance companies is in the midwest, the breadbasket of our country,” said Steele, adding that Farmers Home is one of about 35 remaining in Indiana, nearly all of which are more than 100 years old.
Just like the business of insurance, the business of farming doesn’t look much like it did 125 years ago. But both industries still serve the same purposes they did then, and as long as America needs farmers, farmers will need to protect their properties. Even though the offices may have moved into town, small mutual companies like Farmers Home still have a place on the farm.
Farmers Home early coverages and claims
- Jan. 24, 1918: “Damage to house by explosion of hanging lamp, causing the loss of lamp and damage to rug and wallpaper.” Submitted by Farmers Home Secretary Abe Westfall.
- Aug. 13, 1913: August Diani lost one machine house. It was insured for $80. Annual premium was $1.
- Aug. 22, 1913: James & Scott Emison’s barn and contents were destroyed. They were insured for $400 and had $5 annual insurance premium.
- Oct. 27, 1920: Allen Hague reported the loss of a smokehouse by fire on farm sold to Louis Hoalt, formerly the William Owen farm. The building was insured for $40.
- May 1, 1945: Brooder house loss $50, sack of feed $3.50, 1 rake & scoop $3 for a total loss of $56.50.