Rising premiums led us to investigate different farm property and liability providers. We have been with a local insurance agent and one of their underwriters for as long as I can remember.
For many years we went without a claim; however, the past few years we have experienced some losses. Most storm related, a couple of copper thefts, but the majority out of our control. Never have our losses exceeded our premium. From time to time we had to push a bit to get proper value from claims but the company was good about paying them.
About four years ago, we had a meeting with the agent. The company obliged and premiums were put back in line. Since then the rates began creeping back up. The company gave notice of increases so close to the renewal date we felt our hands were tied. The agent used the fear tactic to hold us hostage, telling us that if we left, we wouldn't be accepted back.
The straw that broke the camel's back came last year when they offered to freeze our premium in exchange for raising the deductible. We ended up taking quite a bit more exposure for no less cost. In the past, when we considered higher deductibles, the cost savings between a $500 and $2,500 deductible was less than 5% of the total premium. For 5%, we preferred the lower deductible.
In shopping, dad contacted some other businesses and asked who their carrier was and if they were satisfied. He received a couple of leads. One of the businesses we contacted indicated they had gone through the same shopping process earlier this year.
When other insurance companies began requesting declaration sheets (brief coverage summary) from their provider, their premiums were lowered. (I guess you have to shop insurance from time to time to make sure the underwriter is being honest, not taking your business for granted.)
We also discovered that many companies expect you to carry insurance and still self-insure. They never want to see a claim come in. I thought the concept of insurance is that for a price, the insurance company assumes the insured's risk.
So, declaration sheets and losses in hand, we contacted three other companies. One had an estimate back to us within days, the second took some pestering, and gave a nearly identical quote to our current carrier. The third never really did get back to us. Our current provider never sharpened their pencil. Their solution was to reduce coverages in order to lower the premium. That just didn't make sense.
In the end, we decided to make a change. Fresh eyes helped streamline the policy and simplify paperwork. The cost savings was nearly 20%, a hefty chunk of change.
The opinions of Kyle Stackhouse are not necessarily those of Farm Futures or the Penton Farm Progress Group.