Farm Insurance - Insurance Policies for Farm Owners Ames IA
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Farm Insurance - Insurance Policies for Farm Owners
Farms are a business. As such, it is smart to ensure them. However, because of the nature of farming (and the unpredictable nature of the business), insurance can be expensive. But in the risky world of farming, a bad year can be all that stands between the farmer and bankruptcy. Therefore, getting insurance for your farm can be critical.
Agricultural insurance generally covers three main circumstances:
- Crop insurance for damaged or lost crops.
- Property and Casualty (P&C) insurance, which provides liability coverage if a hired hand is hurt, and potential coverage for physical property. It does not usually include livestock.
- Livestock insurance.
- Specialized insurance coverage for certain types of farming with unique perils and challenges
Your state government is a good source of information, if you are looking for agricultural insurance. Many states actually have specialized insurance companies within state government (or sponsored through the state) that cover the unique perils for that region. For instance, farmers in California might not buy coverage for hail, because it is less common there. However, in the American Midwest, if you don't buy hail coverage for your crops, you are asking for disaster.
Further, because many regions do have unique concerns within the farming community, there are often insurance cooperatives operating in a specific region. Because these cooperatives can often offer lower prices for the same insurance, it is well worth the research. Your local farming associations will often be able to point you in the right direction.
What will it cost?
In the U.S., Congress subsidizes the cost of buying crop insurance and several states provide state-funded premium subsidies. Rates will ultimately depend on your needs, risk tolerance, insurance plans, production, and location. Remember that anything which will raise risk to the insurance company will end up costing you more. You may have to make some hard decisions between your risk tolerance, and the amount of money that you could afford to lose without jeopardizing your farming business.
Benefit's of Farm Insurance
If you are a farmer, your farm is your livelihood. It is also your business. Insuring it makes good business sense.
You have some good reasons to consider it, aside from the longevity of your farming business:
- Government subsidies are often offered to farmers to offset a portion of the premium.
- Increased coverage levels are offered for several crops.
- Protection for input costs and harvest values.
Keep in mind that crop insurance may serve as collateral for operating loans. Most banks and financial institutions will want to ensure that you have some kind of insurance coverage, to protect your ability to re-pay loans.
Crop insurance does what you'd expect - it insures your crop. The trick with crop insurance is to decide what level of coverage you want. Specific levels ...