Frequently Asked Questions

Q.  What is the difference between a County Mutual Insurance Company and any other mutual company such as NODAK Mutual or Farmers Union Mutual?

A.  County Mutuals have been around since the late 1800’s and are treated differently by state statute and insurance regulation.  A county mutual, however, is restricted to where and what it can insure. For instance, a county mutual cannot sell homeowners' insurance in more than 30 counties in North Dakota. A county mutual is usually “local” in territory but some have gone on to become statewide companies.

Q.  Are County Mutual Insurance Companies financially safe?

A.  Yes. All county mutual insurance companies are required by state law to carry “reinsurance”. Reinsurance means that in any given year, the Mutual company can only lose a certain amount of their reserves before the reinsurance company takes over paying the claims.  However, a county mutual can find itself in financial trouble just like any Company through a series of bad losses over successive years.

Q.  What happens to my premiums?

A.  Your premiums are used primarily to pay claims; however a percentage of the premium goes to your agent, to the reinsurance company, to the State and Federal government for taxes and for administrative expense including, but not limited to, salaries, workman’s compensation, unemployment tax, telephone, postage, printing and overhead.

Q.  My rates have gone up in the last several years more than once and I have not filed any claims. Why would they go up?

A.  Unfortunately, even though you have not filed claims recently, many of your neighbors have gone through a series of catastrophic weather related storms and individual home fires. Since the early 1990’s, property companies in North Dakota have consistently paid $1.10 in claims and other costs, for every $1.00 they have collected. In year 2001, ten companies left our state due to failure to earn a profit over an extended period of time. Further, the stock market over the last three plus years has not produced the investment income most of the companies in our state had anticipated. Accordingly, increasing premiums has been the only way to keep companies from going broke. Again, unfortunately, people who do not file claims are expected to help pay for those that do. In essence, that is the concept of insurance.

Q.  My neighbor got paid for his entire roof after a storm but his roof does not look to me as if it were damaged. He has not fixed it in three years. What was the basis for totaling the roof?

A.  Sometimes damage may not be easily visible. Sometimes, the roof may have suffered insignificant damage but was subject to liberal adjusters.  Often, it may be a combination of both.  Insurance payments for losses turned and paid should be repaired. Your neighbor will not receive additional pay if additional storms come through your neighborhood.