If your farm is growing or has grown at some point in the past ten years or so, you’re familiar with the ‘growing pains’ that come along with that. Matching the size of your equipment line to number of farmed acres, managing more landlord relationships, dealing with bigger numbers and even bigger decisions. You’re handling a bigger business.
Here’s another ‘growing pain’ I hear about. A farmer was recently talking with one of his advisors about how much the value of land, machinery and the overall value of farms have changed in recent years. He said he’s seen some issues happen as other operations grew larger and seemed to get more of a ‘target’ on their back as they became more successful. Sometimes it even meant legal problems for the farm.
The farmer started talking about his own operation and how much it has changed. He told his advisor that the value of his operation has nearly doubled in the past few years. The responsibility of ensuring the farm’s success is on his shoulders. He wants to maintain the farm’s value and continue to grow it for the next generation. He doesn’t want to lose what he and previous generations worked so hard to build.
The advisor asked him about what he’s done, from a farm insurance perspective, to make sure his operation is protected. He said his insurance agent doesn’t really meet with him – the paperwork just comes each year in the mail. He couldn’t remember the last time the agent had met with him or reviewed his farm insurance policies, so he wasn’t sure whether his farm was covered properly.
Protecting the future
The farmer decided to meet with a different insurance agent for an independent review. It turned out his liability coverage was only covering what the farm was like 10 years ago, even though the value of his operation has doubled since then.
This presented a huge threat to the future of his operation and the potential to pass all of it on to the next generation. If something were to happen – a lawsuit, a tragic accident – the farm may not have had enough coverage and could have had to sell land or other assets.
The farmer decided to switch insurance agents and get the right coverage for his farm. Now, his new agent meets with him regularly to discuss what’s new on the farm and to make sure changes are reflected in his coverage. He’s gained peace of mind knowing that his farm is protected for the future.
Has your farm recently grown, or grown in the past few years? Do you know whether your farm is correctly insured for its current value? If you’re not sure, you may want to have an independent review done by someone who specializes in insurance for farms.
Check out the nationally-known speakers of this winter’s Water Street EDGE farm business seminars in Lincoln, Neb., and Champaign, Ill. – and get a 50% discount on your registration when you sign up before Oct. 30.
The opinions of Darren Frye are not necessarily those of Farm Futures or the Penton Farm Progress Group.