Is your farm ready for the unexpected?

Is your farm ready for the unexpected?

The farm’s insurance isn’t usually top of mind – unless you need it.

One of the jobs of the farm leader, as I’ve written about before in this blog, is to take a longer-term view of the operation’s future and make plans to reach that desired future. That’s no easy task. None of us can predict the future, but we can be intentional about our vision as a leader and what we want our farm to become.

We can’t control the events that happen to us as we carry out those plans, however. While it’s healthy to be optimistic about our personal future and our farm’s future in general, the farm leader also needs to be smart in how they’re protecting their farm, from a ‘defensive’ standpoint.

This winter, take some time to go through your insurance policies – or have someone such as an ag risk advisor do that for you. (Photo: bdStudios/Thinkstock)

Farm leaders have to take into account not only their plans to continue their farm’s success in the future, but also to protect what the farm has right now – your assets. From a practical standpoint, those assets allow you to continue farming each day. The buildings and equipment you own are the tools of your trade – and as you know well, come at no small cost.

The danger of growth

When farm operations are growing, whether adding a side business, buying or renting new land, bringing in additional family members or the next generation, more moving pieces usually means new assets. It can mean buying or trading equipment to better handle new acres. It can mean putting up more grain storage or a building for your new seed business.

Our ag risk advisors often find that as farms grow or expand, the farm’s insurance – the very thing needed to protect those new assets – might not get updated accordingly. Often, farmers will tell us that their insurance agent never checks in with them or asks what’s new in their operation. In fact, they haven’t seen or heard from him or her in years.

Or the farmer found it was such a hassle to deal with their agent at all, they just stopped trying to communicate. There’s enough for farmers to deal with without having to worry about insurance details.

Running a risk

Either way, this places nearly all the responsibility for communicating changes on the farm leader’s shoulders, even though they’re already busy. Farm insurance just isn’t likely to be one of those top of mind issues on any given day – unless something unexpected happens and suddenly, you need it, and you need it to be right.

When the farm isn’t insured properly, you’re exposed to a lot of risk. You might not be insured at all for certain items, such as new bins or a new combine you recently traded for. Or it may be that the replacement cost you’re insured for on a particular item isn’t enough to actually replace it if it were to be destroyed. You could still be paying to insure items you no longer own.

No farm leader, no matter how future and planning-oriented, can predict when events like combine fires or tornadoes may strike. You don’t want to lose everything you’ve worked so hard for just because an unexpected, unfortunate event happens.

This winter, take some time to go through your insurance policies – or have someone such as an ag risk advisor do that for you. The bottom line is: make sure your farm is properly protected – that an unexpected event won’t derail your farm’s future plans and success.

The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.

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