What You Need to Consider When Insuring Farm Equipment
Posted by on May 15, 2020 in
Your farm is dependent on the equipment you use. Without it, you cannot work your land, care for your livestock, or make a living. However, many farmers are unaware that their farm equipment is not necessarily insured under the insurance policies they currently own. As a farmer, it’s crucial to have the proper coverage for all aspects of your business, from the land you work to the outbuildings, your livestock and your equipment. If you’re looking for the best possible insurance coverage for your farm equipment, here’s what you need to consider.
Protection Against Loss of EquipmentDepending on the type of farm you operate, you may have a long list of equipment, or you might simply have a truck and a tractor. Regardless of whether you require multiple pieces of equipment or just the basics — when your equipment is out of commission, so is your ability to earn. When you choose farm equipment insurance, you can include it as part of your overall farm insurance package and arrange to “bundle” it for the best coverage at the lowest rates. You will be covered for financial loss or damage, so should the worst happen, you can get back to work quickly. Many farmers assume their equipment is covered under either their home, auto, or commercial insurance policies; however, this is often not the case. Farmers should always review their insurance policies thoroughly with their insurance provider to better understand what additional insurance is required.
Types of Farm Equipment CoveredWhen applying for insurance, be certain to list all the machinery you use. The basics might include:
- Skid Steers
- Field equipment
Types of Perils CoveredA lot of risks exist when operating a farm — ranging from accidents to treacherous weather. Understanding the perils covered by your insurance is always an important aspect to discuss with an insurance broker. If a tornado or severe storm hits, even heavy equipment is at risk of damage. Your insurance is designed to protect you from such damage and provide the money required for repairs or replacements following disasters. Of course, many perils can lead to equipment issues, including:
- Fuel Explosions
- Damage caused by foreign objects
- Road hazards for equipment used on the roads
Customized Equipment PoliciesThe best way to have proper coverage is to discuss custom policy options so you don’t find out the hard way your claim will be denied. No two farms are alike, with varying land sizes, operational requirements, equipment used, etc. All of these factors must be considered when choosing coverage. An example of customization is considering if you want all-inclusive coverage based on a specified dollar amount, or having a policy that lists each individual piece of equipment and its replacement value.
Specific Policy FeaturesThere are also policy features to consider that specify what is covered and how you will be compensated. Therefore, you should discuss the following:
- Loss of use coverage due to accidents
- The terms of replacement based on current prices vs. depreciated values
- The types of deductible limits and how they will impact your premiums