Excalibur’s Guide to Saving on Your Farm Insurance Coverage

To run a profitable farm that can sustain itself for years and years to come, you’ll need to be strategic about your expenses. As a farmer, do you often worry that your Farm Insurance policy contains coverages that you don’t even need? Have you thought to yourself that you may be paying too much?

Farm Insurance coverage is essential to the wellbeing of your farm and should be treated as an operational expense, but that doesn’t mean there aren’t things you can do to reduce your costs. Like any insurance policy, Farm Insurance coverage is calculated based on the chance that you might submit a claim, and through some simple preventative measures and upgrades you can significantly reduce that risk. Even if your farm is just a hobby farm and you’re running it as a pastime, it’s still your blood, sweat, and tears – and you put that effort in for all the right reasons.

Saving starts with getting to know your policy a little better – from the inside-out. Read on for some questions to ask yourself to better save on your Farm Insurance coverage.

Why you should review your Farm Insurance policy annually:

Not only should you take the time to give your policy a quick read-through, but try to do so every year as your farm’s residence – i.e, your home – might increase in value each year, based on market conditions, cost of materials, labour, etc., and your coverage will increase to reflect that. This isn’t a bad thing! This means that if something happens that caused your home to be destroyed entirely, you would receive the coverage that you need to fully replace your home – not just part of it.

But if you find that the increase this year has exceeded the amount it would take to rebuild your home, you can call your insurance provider to do another estimate and update the replacement cost. Never insure your home for its market value, because this can drop whether or not construction costs do. The price you sell your home for is likely to be much less than the price it would take to repair it as it stands today. Market value may also not include the land your farm stands on.

Are all your farm’s outbuildings still in use?

As our farms grow and change, we stop using certain pieces of equipment and buildings and start using others. If you have an older farm where you only utilize a shed or two but have an aging silo or barn that is starting to gather dust, these might not be valuable enough to you to require insurance. Excalibur helps you tailor a policy based on your custom needs, so you can always choose to exclude these outbuildings when determining your coverage to avoid paying extra for buildings you don’t care to insure. If it isn’t listed in your policy, there won’t be any coverage for these pieces. However, if you would want to rebuild these buildings, ensure you include them.

You should insure any listed buildings to their actual value, but you may also have the option of choosing what losses they’re covered from. All-perils is an option, which includes every loss but those that are specifically excluded, but it can cost more than named perils, which limits coverage to specific losses like fire and storm damage.

The same goes for farm equipment just as it does your outbuildings – if something’s no longer in use or you no longer own it, you should consider reviewing your coverage to remove these items. It’s your choice of what you want to list, and you shouldn’t assume something is automatically covered if it isn’t listed on your policy. Moreover, if you have rented equipment that you cover through the renting company, you may save money by insuring it yourself.

Should you raise your deductible?

A deductible is the amount you would pay out in the event of a loss before your insurance kicks in to cover the rest. If you have a lower deductible – say, around $250 or so, you can elect to choose a higher amount of around $1,000. The higher deductible will guarantee you won’t be able to file for smaller losses and your insurance carrier will therefore deem you as lower risk and may reduce your rates with time. Of course, make sure you are comfortable with paying that amount out-of-pocket if a loss ever does occur.

How close are you to a fire hydrant?

The closer you are to a fire station or fire hydrant, the more likely you are to receive help in time if there’s a fire. If your fire department has recently been accredited for shuttle tanker service, be sure to inform your provider as this may help in reducing your rates. Generally, any farm residence that is within 1000 feet or so of the nearest fire hydrant may qualify for lower rates. In addition, if you install a dry hydrant on your property or have a larger pond nearby that can be used to put out a fire, it may qualify you for a discount.

Do you offer any agritourism activities on your property?

If you offer any agritourism activities as a part of your business, the type of recreation or events you offer will directly influence your coverage – especially if liquor is offered on premises (for which you may need unique coverage or a change to your insurance provider altogether.) If you choose to eliminate an activity or add one on, it’s worth giving your provider a call.

It can be tempting to add on another tourism activity for extra business and not tell your provider to avoid the extra expenses. However, ignoring these types of risks and leaving a formidable gap in your coverage can cost you significantly later down the line. If you’re conjuring up some new plans for agritourism activities on your business premises, be sure to discuss with your Farm Insurance provider as soon as possible.

Are you experiencing lower sales, or do you no longer sell a product?

Many farms – if not all farms that aren’t exclusively “hobby” – sell some type of product, whether that’s a raw good or crop, livestock, or otherwise. Annual sales are critical to your business, but they can also influence how much you’ll pay for your insurance. Notify your provider if you have noticed lower sales over the last year or if you have stopped selling a product altogether.

A change in business could necessitate a change in coverage. It’s always a good idea to review with your broker to ensure that your newer products are covered/if higher sales are expected and/or if you need to reduce coverage because you have stopped a line of business or are anticipating lower sales.

Are you renting out one of your dwellings to tenants?

A chance in occupancy merits a call to your insurance provider, whether that’s the addition of a renter or the absence of one. If you used to rent out one of your residences or rooms to a tenant but are now using it for family members or employees, this may qualify you for better rates. Typically, homes that are being used for renting will be considered higher risk than if they were occupied by farm employees or family members. Furthermore, you should always discuss with your broker about the viability of long-term or short-term rentals, as risks like these may not always be accepted by Farm Insurance carriers.

You should avoid leaving homes unoccupied altogether and opt for some sort of regular use to ensure that no issues arise during a period of vacancy.

Farm Insurance is critical, but it doesn’t mean you can’t review your policy and current circumstances or farm usage to qualify for better rates. Ensure you are getting the coverage that you require without paying for anything extra by doing your due diligence and reviewing. If you need any assistance, Excalibur Insurance Group’s experts would be happy to help you out and find you the solutions you deserve for comprehensive, affordable Farm Insurance.