6 ways to get the most out of your farm insurance
Most of us view insurance as an unavoidable expense we don’t give much thought to once the annual bill is paid. However, there are big advantages to working closely with your insurance provider to make sure you have the right insurance coverage for you and your farm assets.
Farm insurance covers everything from machinery breakdowns and fuel spills to theft and liability. Life insurance can also protect you and your family in case you’re injured or killed in a farm accident.
Here are 6 key considerations when thinking about insurance:
Insurance requires more than an annual policy scan and writing a cheque to cover premiums.
It’s easy to overlook insurance options when focusing on farm growth. However, farm insurance requires more than just an annual policy scan and writing a cheque to cover premiums. Optimize your insurance strategy with your provider to ensure your protection is the right fit for your operation. Do you need equipment breakdown insurance if you lease? What type of insurance do you need if you have a small farm? Is wind insurance necessary if high winds aren’t a problem in your region? When shopping for insurance, your provider is best positioned to recommend what you may need.
As you consider the implications of your potential injury or death on the farm, use the various scenarios as a motivator to review outcomes and understand what would happen to your spouse, children and any business partners should you be unable to work. Then take these outcomes and work them into a plan, whether it means your farm continues under someone else’s management, a business partner purchases it, it ceases to exist or any other outcome.
Understand that different life insurance coverage levels can help in a family crisis. Life insurance can cover all your debts, or just partially cover them. Partial coverage can be structured to relieve the family from debt for a year or more while the family is left to grieve and sort out business questions.
Invite your provider for an occasional equipment assessment and site visit. This makes some farmers nervous because they fear an on-farm audit will lead to higher premiums. However, reassessing farm insurance needs and coverage means you’re getting optimal coverage specific to you. You’ve added livestock to your farm operation or added a gas pump – let your provider know about your growth as a farm.
Insurance providers are willing and able to help you get the best deal for your farm operation, but it starts with an open, honest conversation. With nothing to hide on the farm, the farmer only stands to gain with possible lower premiums and insurance packages that truly reflect their operation.
Have you had fertilizer or herbicide spillage? Is the snow load on your outbuildings realistic? Do you have issues with spray drift? Did your barn flood due to a water leak?
These are real risks, and you need to know if your farm insurance covers you in such situations. Find out those answers with good communication with your provider. Also, always remember to call your agent immediately when you buy and sell equipment.
Even if you’re young and healthy, life insurance is good to have. You can lock in your premiums, so buying young means lower payments. We also tend to be healthier when we’re younger, when issues like high blood pressure or high cholesterol aren’t a problem. Since premiums are based in part on our health, buying life insurance when we’re young and healthy is a good idea.
Although uncommon, young people may be diagnosed with a terminal illness. Depending on your life insurance structure, coverage can even be paid in full if you’re still living. It’s a good option for peace of mind during an extremely difficult time.
Life insurance can’t change circumstances, but it can allow families some breathing space to begin healing without worrying about some financial details.
Many insurance providers have teams with specific expertise to match farm operations and the various types of coverage to protect your livestock, equipment, crops and land. Some even use high-tech tools such as thermal imaging devices to check for electrical hotspots hidden inside walls, ceilings and fuse panels. Use these experts to learn about — and fix — issues before they become problems, such as updating a faulty wire before it starts a fire.
There is no one-size-fits-all farm or life insurance policy. An insurance provider can help determine the best policy and coverage options for you, your family, your farm and your goals.
Here are three questions to ask your insurance provider:
Do I have gaps in my coverage?
My farm and family are growing and changing, does my insurance need to change too?
How can I save money?
There are pros and cons to farm incorporation – consider these business factors to make the best decision for your operation.