Top Farmer’s Insurance FAQs We Get Asked
Navigating farmer’s insurance can be daunting, especially for farms with equipment, buildings, and livestock lists. It’s hard to figure out where to start or what to ask to make sure your insurance is working for you. A great way to make the most out of having Harvard Western as your insurance broker is to let us review your coverage and ask us questions! Here are some of the top farm policy questions our advisors get asked:
Did you know that your deductible can vary for each coverage or peril? For example, your deductible on a barn might be $500, but the deductible set for your equipment is at $1,000. Every farm is different, and the amount you pay for a claim should reflect what suits your operation best. Ask your advisor to review any discrepancies between the deductibles on your policy. Choosing the amount for your insurance deductible should depend on an emergency’s size or likely risk.
A higher deductible can help reduce your premium, typically using a percentage rate. However, keep in mind that the amount of the damage must be higher than your set deductible for the loss when making a claim. Opting for a higher deductible will help make your premium more affordable, as long as you are okay with not making claims on more minor losses.
Fun Fact: When there is a loss (singular) to more than one item of property listed on your policy, all caused by the same occurrence and insured with the same company, only one deductible will apply. However, the insurer will use the highest single deductible of all that apply.
Insuring to Value
Establishing the correct amount of insurance to rebuild a building can be difficult. The last thing anyone wants to do is increase the premium on the policy any more than you have to. It is essential to insure a building to the accurate rebuild value, whether you have a grain bin or a farm shop. The cost to rebuild some of these items has gone up from previous years; as a result, you could be underinsuring. Underinsuring is a growing issue, increasing costs for construction materials and labour. A lower insurance limit can leave you open to greater risk and co-insurance. More often than not, the last time the values got reviewed could have been at the time of the policy inception.
Fun Fact: The best way to determine the value you should insure the property is to check out the current market for a similar item (consider type and size) and its costs.
A blanket limit is when one coverage limit shows for all items in that category: equipment, tools, buildings, or livestock. When was the last time you reviewed your machinery or tools blanket list? You need to review your blanket list before spring to ensure you are insuring the correct items. Don’t pay for an item you sold last year, and don’t be without coverage for that new piece of equipment! Review these lists regularly, and for sure every time you change a piece of equipment.
Fun Fact: Did you know that when you claim a piece of property in your blanket limit, your insurer first asks your broker for a copy of the list they last saved on file? What would happen if your new combine wasn’t on that list when you go to make a claim? I don’t know about you, but I’d instead not find out.
Loss of Use
Loss of Use is probably one of the most useful additional coverages you can add to your policy. The coverage reimburses the costs to rent replacement equipment if insured on the policy when it becomes inoperable due to an insured peril. When purchasing new equipment or selling, ask your advisor what the limit for your loss of use is.
Fun Fact: Loss of Use is not subject to a deductible and applies to each piece of equipment in a combined loss. For example, a tractor/baler claim suffers an accident in the same occurrence; the coverage applies per item.
The comprehensive farmer’s liability covers owned, rented, or leased land and property for personal and farming activities. Basic liability starts at $1 million and can go as high as $10 million. It is also the cheapest and most worthwhile coverage on your policy to purchase. It provides coverage for bodily injury and property damage arising from personal actions, ownership of property, farming operations and volunteer liability concerning farming operations. Protection can even cover an unlicensed truck while the use is solely on your farm property. Taking that combine out on a public road to get to the field? If it hits the power line, your liability coverage will shield you from the brunt of expenses.
Fun Fact: The price difference between million-dollar increments is relatively low. Ask your broker how much it would cost to increase the coverage for the year.
Have questions? Give one of our experts a call! Let them help you find what you’re looking for and help you protect what matters most.