The ongoing trade war has many farmers worried about their long-term prosperity, and not without good reasons. With the economic malaise that’s lingering over American farmers unlikely to dissipate anytime soon, farmers everywhere need to be taking extensive steps to guarantee their long-term survival, beginning with mulling the prospect of additional insurance coverage.
Despite the imperative of getting good business insurance, however, many farmers are at a loss when it comes to picking the right policy plan for their operations. Here’s when you know you need insurance for your farm, and how to navigate the purchasing of coverage.
Know the perils that you face
The most important step in knowing when you need insurance for your farm is figuring out which perils that you’re presently facing. Some agricultural operations will face different problems than livestock ones, for instance, so know that you can’t approach insurance for your farm in a one-size-fits-all fashion. You need to thoroughly review the options in front of you, conduct an analysis of how well they meld with your existing coverage and consider how you might scale your farming operations in the future before buying insurance.
A review of underinsurance amongst farm and ranch families came to an unfortunate conclusion; those who under-insure their farms are effectively undermining the insurance coverage that they do enjoy. This means that you can’t just buy a little coverage and sleep soundly at night but must instead spend what’s necessary to ensure your vital operations are covered. Once the most essential elements of your farm are covered, you can look elsewhere to cut insurance costs. Farmers who want to know more about the plague of underinsurance amongst American farms should consult the National Rural Health Association’s policy brief on the subject.
It also can’t be stressed enough that the appropriate coverage for your neighbors, friends, or competitors may not be sufficient for your own operations. Commercial farmers need differing levels of coverage than a hobbyist who aren’t trying to turn a profit, after all, so modeling your insurance policy after others is going to be a risky endeavor that should be avoided by wise farmers. When mulling farm coverage, take into consideration the acreage of your farm, your recent income levels, and the extent of your assets, even and especially any livestock or specialized equipment you may have.
Furthermore, if you’re unfamiliar with every inch of your farm, you may be leaving something crucial uncovered or under-covered. That’s why you should consider…
Running a farm audit
One of the best ways to determine when you need insurance for your farm is to run an audit of your existing operation to determine which assets you have. All of your buildings need to be taken care of, for instance, which some farmers can forget about if they’ve recently been expanding their operations; if you put up a greenhouse last summer or want to construct additional buildings elsewhere on your property, you need to be factoring insurance into the costs associated with expanding.
You should also understand that you can’t ignore the needs of your farmhands when mulling insurance coverage options. Larger farms that employ a host of workers to help them bring in their crops, manage their livestock, or construct new buildings can find themselves up to their necks in trouble if a disaster occurs and you’re not adequately covered. Learning about your liability as a farm employer is an important part of keeping yourself out of legal jeopardy in the event of a sudden crisis that impacts your workers.
Any insurance provider who offers you generalized coverage that’s a “good deal” can be safely ignored; every farm needs specialized coverage that differs based on its assets and size. Scout around for providers who are willing to appreciate the special nature of your farm, as those who attempt to give you a one-size-fits-all policy will be letting you down if a structure burns to the ground or your crops fail. Finally, keep a close eye on your health insurance costs, as it’s a matter of fact that rising healthcare costs are forcing more farms into bankruptcy.
That’s according to the U.S. Department of Agriculture, at least, which recently noted that many American farmers are struggling specifically because they lack adequate healthcare coverage. If you suffer an injury or untimely death, a lack of health or life insurance could spell financial ruin for those you leave behind, so be sure to cover all of your bases if you’re serious about keeping the farm in the family. You may think you’re fit as a fiddle and not in need of excellent coverage, but one fall of a tractor or unexpected heart attack could be enough to thrust you into financial uncertainty. Keep every eventuality in mind, and soon your farm will be properly insured and ready to face an uncertain future.
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