Am I covered? Don’t find out the hard way that you don’t have coverage on livestock, machinery, buildings

What if snow collapses my shop? What if my livestock drift off in a blizzard and die? What if a spark starts my calving barn on fire? Am I covered?

Insurance policy holders all hope that that three-word question will be met with a “yes” from their agent whenever disaster strikes. In order to ensure that they are met with an amicable response to that question, producers need to work with their agents to establish a policy that will meet their needs as well as their financial situation.

Most of the basic farm insurance policies cover the insured’s dwelling/house, out buildings, scheduled items (which can vary from equipment, to feed, to livestock), and liability. Some plans also come with a blanket or farm personal property category used to cover other assets on the property.

In most policies, buildings are covered from basic perils which include fire, lightening, wind, and hail. Policy holders have the option to increase security by purchasing “broad coverage” as well which would protect outbuildings from issues caused by weight of snow or ice and vandalism.

Jesse Fleming, of Montana Farmers Union Insurance, said that if the building is in good enough shape, he would recommend putting broad coverage on it for replacement value.

Under basic coverage, buildings would be covered in the event of a fire, but they would not be covered if they collapsed due to snow. Collapsing due to ice and snow is only covered if the insured has purchased broad coverage.

Fleming explained that another thing to note is that in the event of a fire or collapse due to snow, the contents of a building would not be covered unless they are itemized and included in the farm policy—only the building would be replaced or repaired.

Licensed vehicles that were damaged in a collapsed building would not be covered either unless they had a separate full coverage auto insurance policy.

In the tragic event that a calving barn were to burn down killing livestock inside, only the building would be covered for repair or replacement. In order for the insurance company to cover the loss of cattle, farm insurance holders would have had to include their livestock as a scheduled item in their policy.

Basic perils can vary for livestock depending on insurance companies, but typically they include fire, lighting, wind, hail, electrocution, drowning, theft, accidental shooting, and attack by wild animals.

Notice that this list says nothing about blizzards.

Many producers don’t know that there is additional “blizzard coverage” for livestock that you can purchase on top of a basic livestock coverage policy.

During the October 2013 Atlas blizzard that primarily affected western South Dakota, and Wyoming, many cattle died from the winter conditions. Many of those deaths were caused by the animals’ lungs filling up with fluid. This was a gray area for basic livestock insurance because the animals technically “drowned” but the drowning didn’t take place in a body of water (which would have been covered in a basic plan). It was instead due to the blizzard conditions and how the animals’ bodies responded (which wasn’t covered under most of the basic livestock policies).

These gray areas resulted in lawsuits. To protect against similar situations, producers may want to evaluate their plan and consider adding blizzard coverage to their livestock policy.

In order for buildings to be covered they must be on a permanent foundation. Hoop barns/vinyl sided buildings can be insured, as long as they have a permanent foundation. Sheds, calf shelters, or other shelters that are on skids or do not have a foundation may not be covered.

In addition to a basic farm policy that includes liability, producers can also purchase either worldwide or excess umbrella coverage.

Alan Voller of Farmers Union Insurance Agency, recommends that producers always purchase a worldwide umbrella policy because it protects you in situations that occur off of your property while an excess umbrella policy is limited to your own farm/ranch.

Voller explained that it is important to check with your insurance agent once a year at minimum to make sure that what you own and what you have insured match. An even better system would be to contact your agent any time you make an equipment purchase or build a new building so that it is covered right away.

When purchasing a policy, it is important to abide by the stipulations set in place by that policy.

Some insurance plans mandate that in order to be covered from perils such as fire, hay must be stacked with a certain number of bales in each stack and that each stack must be a certain number of feet away from the next. Failure to comply with these guidelines could leave producers in a situation where they are uncovered.

This all goes back to working closely with your insurance agent and knowing the details included in your policy.

Fleming said that one question all producers should ask their insurance agent is “how are claims handled?”

“We’re pretty lucky that we have local adjustors,” Fleming said of his company. Rather than wading through phone systems to reach someone in New York, his adjustor and company headquarters are located just 1-2 hours away from his office.

Knowing how the company is doing, where they are based out of, and who to reach out to in cases of claims is all important information to obtain before purchasing a policy.

Every producer’s policy will depend on their needs, financial situation, and the amount of risk that they are willing to take on themselves. Because of this Voller encourages producers to “seek an agent who understands your operation and that can meet your needs.”