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.
It all depends, said Chuck Fugate of State Farm Insurance in Ozark, 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? 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 Chuck. 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 your Missouri Extension agent or 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.
A relatively new type of coverage is pasture, rangeland and forage insurance that farmers can buy once a year should rainfall be less than normal, explained Lisa Dale with FCS Financial.
How do you select the right insurance agent and policy? “Ask the farmers at the local coffee shop or feed store,” said Chuck. “If you did a good job for them, they’ll refer you.”
Chuck takes time to visit his farm clients. With the underwriter, he’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.
Gordon Carriker of the Extension office in Ozark offered this advice 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.
