With grain flowing into the bins, you may want to double check the insurance policy you have for your grain bin setup. Bill McIntire, a Farm Bureau Insurance agent in Johnson County, Ind., says this is one of the most overlooked areas for insurance coverage.

“I don’t think farmers intentionally neglect it in most cases,” McIntire says. “I just don’t think that it’s utmost priority to them.”

He shares that farmers get busy and may not have time to connect with their agent to ensure their policy is up to date. And unlike the policy you have on your home, policies for your grain bins and other farm structures are not automatically increased every year to match current value. It will take a conversation with your agent to bring that policy up to date.

What has changed

For many farmers, their bins were constructed 10 or more years ago, and the policy may still be for that initial price of the bins. Not only has inflation affected grain bin values, but construction costs have skyrocketed at an alarming rate.

McIntire says that farmers are forced to take increased construction costs, although those costs may not always be justified. This means they are paying more to construct a bin than what the materials and labor would be worth. A shortage of companies to construct bins has resulted in higher-than-expected construction costs, which can be difficult for agents to manage when writing a policy.

“That’s a number that you can’t assign a monetary figure,” McIntire says. “I can figure the cost of metal. I can figure the cost of labor. And I can get relatively close on what those two things are in our area.” However, McIntire shares that it’s almost impossible to assign a dollar amount to the inflated prices associated with high demand and few grain bin companies. The only solution he sees to that problem is more companies to build bins.

Those falsely inflated prices could lead to higher premiums initially. McIntire says this is a scenario where he will evaluate the policy after a year or two to potentially lower the premium because that additional, “inflated” construction cost isn’t part of the bin’s value.

“As an insurance salesman, I should probably say to keep covering it,” McIntire says. “But as an insurance agent who really likes my farmers, they’ve got a hard enough time, and I don’t want them to pay more on insurance.”

Check in often

Evaluating your grain bin policy regularly is the key to ensuring your coverage is sufficient, McIntire says. If your agent is not reaching out every year or so to conduct an in-person visit at your farm, McIntire says that is a red flag.

He adds that the best time to meet with your agent is between February and March. He also advises against using an online insurance company. It may offer cheaper premiums, but you may be giving up adequate coverage.

Looking ahead at a poor year for the farm economy, McIntire understands that some producers may want to opt for that lower premium. He says that if you can afford to replace part or all your grain bins if something happens, then you can self-insure to save money on premiums. However, he does not recommend going this route with your larger bins that are pivotal to the operation. Rather, McIntire suggests self-insuring with smaller, overflow bins.

Most importantly, McIntire says to cultivate a personal relationship with your agent. They should be familiar with your farm and should be kept in the loop with any changes. This will ultimately ensure that your insurance coverage is adequate and tailored to your needs.