Do you need farm/ranch insurance? You’ll find out after an accident, lawsuit, disastrous weather event, fire or theft.
How much insurance is enough? The answer depends on what you value and what the prospects are of losing it. When you buy insurance, you’re betting on a future incident – while your insurer is betting that incident doesn’t happen. Maybe you value your blue tick hound or a favorite trail horse. Could be a hay barn and your tractor. But should you insure a 50-year-old shed? What about your 100 acres of alfalfa or your show cattle and prize bull? What about your milk herd or corn crop?
It all depends, said Virginia Walls of State Farm Insurance in Paragould, but at a minimum every farm/ranch policy starts with liability insurance to cover accidents to hired hands, visitors, suppliers and others on your property. What if a cow breaks through a fence and is hit on the highway, causing extensive damage to the truck that hit her? Or perhaps you have an agritourism business that attracts visitors to your farm for a fee. These situations demand liability insurance.
Another “gotta have” is insurance on your farmhouse. However, you may not need to insure every building. “You have to weigh the cost of the insurance against the replacement cost of an uninsured building,” said Virginia. Costs can vary, too, with location. If you’re in tornado alley, you’ll likely pay more for insurance.
Then there’s your $50,000 tractor and $100,000 combine. The high price of farm equipment virtually dictates insurance coverage. Don’t forget rustling: insurance can cover that, too.
What about animals and crops? Most livestock and crop insurance are highly specialized, protecting future income or declining prices. Get to know the agricultural professionals in the local Natural Resources Conservation Service or Soil and Water Conservation District offices; they can guide you through the various federal and state programs. You also may be able to buy livestock and crop insurance from the insurer that covers your farmhouse and barns.
Any kind of domestic animal can be insured. You can insure individual animals, such as a prize bull, or insure herds. Herd insurance might value every brood cow and her offspring, including newborns, at $700 – versus the thousands of dollars for the bull.
How do you select the right insurance agent and policy? “Ask the farmers at the local coffee shop or feed store,” said Virginia. “If you did a good job for them, they’ll refer you.”
Virginia takes time to visit her farm clients. With the underwriter, she’ll walk the farm, look at the animals, inspect each building and help the farmer do the cost/benefit analysis of whether to insure or not.
As with any type of insurance, shop around and cost compare. Ultimately, the agent you select is one you like, respect and trust.
There are some general rules of thumb for insurance buyers: (1) don’t over-insure, (2) select a deductible level you’re comfortable with and (3) make sure the liability portion covers what you’re most likely at risk for.
