WEDNESDAY, FEBRUARY 15, 2012
This week, the future of farming is at the 47th National Farm Machinery Show. The National Farm Machinery Show is here with products, services, demonstrations and of course, the Championship Tractor Pull.
As the nation’s largest indoor farm show returns to the Kentucky Exposition Center it’s clearly evident that farm and ranch owners have a different lifestyle than other businesses, which translates into unique insurance needs.
 Traditional insurance might not quite cover all aspects of farming or ranching which is a special way of life, and it’s vital that it stay protected. Although much of agriculture is now mostly dominated by large corporations, the traditional small family farms are a vital part of our economy. Significant losses can be devastating to the entire country and risks must be controlled and insured as much as possible.
Determining Your Needs: In determining which agricultural insurance that fits your needs, you must first decide what your needs are. First, are you a farm? Or do you farm as a hobby? This can be a bit difficult to define but it is important because a standard homeowner’s policy may cover certain hobby activities, so long as they do not produce a profit. However, some insurers maintain that once production and sales of a product occur, then a farm policy is necessary.
Once you begin to make a profit, you must define what you produce, how much, and all operations that are completed within the farm. For example, you must define what crops are grown, what livestock are raised, what products are sold, which employees work, equipment used, visitors allowed, land rented, buildings used, etc. Only after everything is defined can you be adequately insured.
The Farm Policy: The standard farm policy is a hybrid of homeowners coverage, commercial business insurance and specialty insurance. The basic policy covers property, liability, and medical needs on the farm. In addition to the basic policy, many insurers will give some additional options of specific add-ons or “endorsements” to customize your policy to your needs. Such endorsements might include:
A. Exclusion Coverage which expands your basic policy to cover certain buildings or animals that are specifically excluded from coverage, but covered by the endorsement.
B. Operation of Building Laws will cover the cost of bringing a house or outbuilding up to code after a loss.
C. Boarded Animals Coverage for liability or property damage coverage if a loss is caused by or to a boarded animal.
D. Crop Insurance protects the farmer from a loss of a seasonal crop from a disaster.
Farmers and ranchers are still the heart and soul of the American heartland and should be protected with adequate coverage in all areas. In addition to a farm policy, any owner of a farm should seriously consider life and disability insurance to protect the farm and family in the unlikely event that a catastrophe or accident may have tragic consequences.
By Matt Reynolds - Google+
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