Farm Insurance

Farms’ operations may include many risks and exposures that could lead to serious accidents and significant financial ramifications. Even the most experienced and diligent farmers may eventually need to manage the aftermath of costly incidents. With that in mind, a comprehensive farm and agriculture insurance portfolio may be necessary. 

What Is Farm and Agriculture Insurance? 

Farm and agriculture insurance provides critical financial security for farmers and their finances. An adequate insurance portfolio may financially protect policyholders from unforeseen circumstances leading to costly losses. Farms are vulnerable to various perils, such as natural disasters, equipment breakdowns, crop failures and liability claims. Fortunately, farm and agriculture insurance serves as a crucial safety net capable of limiting out-of-pocket consequences. 

How Does Farm and Agriculture Insurance Work? 

Farm and agriculture insurance typically consists of multiple types of coverage bundled together to meet the specific needs of individual farmers. The core components of farm insurance include: 

• Property insurance—This aspect of farm insurance covers physical structures such as barns, silos, machinery and equipment against damage or loss due to fire, theft, vandalism, storms and other covered events.

• Liability insurance—Liability coverage protects farmers from legal claims and lawsuits resulting from bodily injuries or property damage sustained by third parties on the farm premises. This could include accidents involving visitors, customers or neighboring properties.

• Farm income insurance—In case of unforeseen circumstances, such as extreme weather conditions or crop failures, farm income insurance compensates for the lost income that the farmer would have earned under normal conditions.

• Livestock insurance—This coverage specifically addresses the risks associated with raising livestock, including accidental death, disease outbreaks and theft.

• Equipment breakdown insurance—Farm machinery and equipment are vital for modern agricultural operations. This coverage helps repair or replace essential machinery that breaks down due to mechanical or electrical failures.

When a farmer purchases farm and agriculture insurance, they pay a premium based on the level of coverage and the assessed risk associated with their farming practices and location. The insurance provider evaluates various factors, such as the type of crops grown, the size of the farm and historical loss data, to determine the appropriate premium. 

How Does Crop Insurance Work? 

Crop insurance is a specific type of coverage that safeguards farmers against losses related to crop failures, low yields, or reductions in market prices. It helps ensure that farmers can recover financially from adverse events that impact their crops. Crop insurance may include various options, including the following: 

• Multiple peril crop insurance (MPCI)—This coverage can help pay for losses caused by many common perils, including fires, disease, insect damage and weather-related incidents (e.g., hail, frost, wind and drought).

• Crop revenue insurance—This component of crop insurance may help farmers recoup financial losses related to lower crop yields or reduced market prices of their harvests.

• Crop-hail insurance—This part of a crop insurance policy may enhance MPCI for hail-related losses by having a low or nonexistent deductible. As such, if hail affects only a small part of a farm, a policyholder will have limited out-of-pocket costs.

How Much Does Farm and Agriculture Insurance Cost? 

The cost of farm and agriculture insurance can vary widely depending on factors such as the size of the farm, the types of crops and livestock involved, the coverage limits, the location and the deductible chosen. The government may often subsidize crop insurance premiums to make it more affordable for farmers.  

Get the Right Coverage 

With over 50 years of serving farms, homeowners and families, the Miller Monroe Farrell Insurance Agency is well-equipped to help farmers assess and address their coverage needs. Contact us today to get started.