Farming is replete with many risks. These include erratic weather patterns, the high cost of seeds and farming machinery, and weak prices for agricultural products. That’s why purchasing agriculture insurance is an absolute necessity. Whether you are growing crops or rearing animals, agriculture insurance helps farmers like you manage uncertainties and hedge against risks in this industry.
Every farm is strongly advised to get agriculture insurance. In most cases, crops, livestock and machinery are exposed to seasonal climatic variations. To hedge against these risks, buy an agriculture insurance policy that’s just right for your farm.
As a farmer, what should you consider before buying an agriculture and farming insurance coverage policy? Below are seven of the best agriculture insurance tips to guide you in this quest:
Tip #1: Use agriculture insurance to mitigate risks
Mitigating risk is a critical component of many agriculture insurance tips. Agriculture can be a risky sector, where the volatile weather and unpredictable environmental conditions may affect your earnings drastically.
When seeking agriculture insurance coverage, you need to consider the ability to cover a wide range of scenarios. It should cover liability, personal property, dwelling, watercraft and other risks. Consider multiple peril crop insurance coverage that cushions you against financial interruptions in a particularly bad year.
Tip #2: Use an insurance broker
If this is your first time buying agriculture insurance, you should use the services of an insurance broker to secure your farm equipment and assets. The broker will provide you with the best agriculture insurance tips, helping you pick the most appropriate coverage for your farm.
The advantage of using an insurance broker is that they work with multiple insurance carriers, as opposed to an agent who is only mandated to sell insurance from the company they work for.
An insurance broker’s aim is to get you insurance with the carrier that best serves your needs. As such, you can be sure you’re getting the best package at the best rate. The insurance broker has vast experience and knowledge. They will take you through the various options available and help you choose the agriculture insurance policy appropriate for you.
Taking care to explain to you what each policy’s strengths and weaknesses are, an independent agent looks at your unique circumstances, making sure all your assets are covered.
Tip #3: Get accurate agriculture insurance quotes
When looking for agriculture insurance coverage, applying for the right insurance at the right price is critical. The policy should provide your farm with comprehensive coverage. You want to be sure it will cover not only your farm but your crops, animals, structures and farm machinery too.
Tip #4: Establish the type of agriculture insurance coverage you need
As mentioned, your agriculture insurance policy must provide you with adequate coverage. Although the cost is critical, knowing what you need to cover will help you choose the best quote. This way, you can choose the company with the most comprehensive policy for your farm and unique needs.
Please don’t give in to the lure of the cheapest policy since it may not adequately cover your farm. The key is to make sure the insurance firm is credible enough to provide you with comprehensive coverage at the lowest possible price.
Tip #5: Ask for agriculture insurance discounts
There are potential discounts in your agriculture insurance coverage, but you won’t get a discount unless you ask for it. There is no shame in asking. After evaluating your coverage needs based on your budget, another way to ensure you get the best deal is to ask the insurance agent if your coverage comes with a discount.
Often, there are discounts based on how you pay your policy. For instance, annually paying your policy may attract a discount for a free month or two compared to paying monthly. You might also receive discounts if you purchase several policies from the same carrier. If a discount is on offer, it makes sense to take advantage of it.
Tip #6: Make sure the insurance company is reputable
One of the critical indicators of a good insurance company is the ability and willingness to pay out on their policies when necessary. An agriculture insurance carrier may promise heaven, but if they have a track record of failing to honour their policies, keep looking. You can’t entrust the future and security of your farm to an insurance company without establishing their credibility.
Use reviews, references, and rating websites to check a company’s credibility. The ratings are a good indicator of a company’s financial health, which indicates their ability to meet financial obligations.
When looking to establish an insurance company’s credibility, check how they’ve performed in the past, their projected future financial performance, their financial reserves, and their return on investment. If you’re not comfortable with any of these indicators, that’s a huge red flag.
Tip #7: Always be truthful in your insurance application
Knowingly misrepresenting facts on your insurance application is extremely dangerous. Please don’t do it! An insurance company is indemnified from honouring a policy based on an untruthful application. If you lie concerning any of the critical assets on your farm, you are exposing, instead of hedging, your farm against insurable risks.
While lying may get you a cheaper premium, you expose yourself to the risk of a cancelled policy. Even if you convince them not to cancel your policy, you are likely to be charged extra premiums after the policy and the rates are adjusted.