Your farm can be rewarding and enjoyable, but these business ventures also require significant risk management and loss control measures to avoid potentially catastrophic incidents. Many risks and exposures may impact your farm on any given day, and without proper planning, could lead to irreparable financial ramifications. Insuring your farm should be a top priority.
What Does Farm Insurance Typically Cover?
Farm insurance consists of many coverages you may need to compile within an overall insurance portfolio. Although the needs of your farm may be unique, the following policies are generally advisable:
- General liability insurance—If a third party, such as a guest or passerby, is injured or there is damage due to your farm’s operations, this coverage can help pay for medical bills, lost income and legal costs.
- Farm dwelling coverage—This coverage can provide financial protection for the structure of your residence and its contents.
- Farm outbuilding coverage—Farm insurance can provide financial assistance if a covered event damages your property’s barns, sheds or silos.
- Livestock coverage—This coverage can help pay for losses involving cattle, poultry and other livestock, including from fires, flooding, theft and animal attacks.
- Workers’ compensation insurance—If employees suffer work-related illnesses or injuries, this coverage can help pay for their medical expenses, compensate them for lost wages and assist with your legal costs if a lawsuit is filed.
- Farm equipment insurance—This coverage can financially protect your farm’s machinery and tools by helping to pay for repair or replacement costs if a covered event damages a covered piece of equipment.
- Commercial auto insurance—Your insurance can provide financial assistance for incidents related to vehicles you own that are used for your farm, including paying to repair or replace them and providing financial aid for third-party losses after auto accidents for which you are liable.
Is Crop Insurance Necessary for Farmers?
If your farm grows crops, you should take steps to secure this critical financial investment. An incident affecting your harvest could have dire ramifications and even jeopardize your farm altogether. Fortunately, crop insurance can help insulate you from losses that might otherwise be catastrophic. Crop insurance generally includes the following options:
- Multiple peril crop insurance (MPCI)—This coverage, supported and regulated by the federal government, can provide coverage for your crops from the following perils:
- Weather (e.g., hail, frost, wind)
- Insect damage
It may also protect farmers financially from drastic changes in the yield or price of their crops. For example, a type of MPCI insurance may be available to compensate you for the difference in a down year’s revenue compared with previous seasons, regardless of the cause.
- Crop-hail insurance—While MPCI may already include hail coverage, this can further limit your crop-related financial losses and may have a low or even nonexistent deductible. It generally may also be purchased at any time in the growing season.
Can Farm Insurance Cover Damages Caused by Natural Disasters or Severe Weather?
Some farm insurance policies, such as dwelling, outbuilding, livestock and crop coverages, may provide financial assistance in response to some weather-related losses, including those caused by hail, lightning and frost. Your coverage’s capabilities and limitations may vary regarding windstorms, flooding and earthquakes. You should work with a qualified insurance professional to ensure adequate coverage.
Get the Right Coverage
At Interstate Insurance Services, we have more than 30 years of experience servicing the coverage needs of individuals, families and businesses in Newton and throughout central Iowa. Our dedicated agents will use their collective knowledge to assess your insurance needs and craft optimal policies. Contact us today to get started.