6 Mistakes to Avoid When Choosing Farm Insurance Policies

Nov 21, 2020 | Business Insurance

There are more than 2 million active farms in the United States. Though many farms produce different crops or raise different livestock, they all have one similar need: farm insurance.

Choosing farm insurance policies takes time, but when you find the right coverage, your business will be safe from the most common threats.

However, if you’re like most farmers, you’re not quite sure where to start when it comes to choosing coverage that will work for your operation. It’s not as difficult as you might think.

You just need to avoid making the most common mistakes when you’re looking for coverage. Here are a few key issues you’ll want to avoid at all costs.

1. Not Shopping Around

When you’re looking for a new insurance policy, it’s always tempting to go with the first insurance company you find. While this can work out for some farmers, it’s almost always a bad idea.

Choosing the first insurance provider you find means you’re not able to compare your options or the factors that contribute to your farm insurance cost.

The best thing you can do is shop around. Get quotes from several farm insurance providers.

Speak with their individual agents and pay attention to how they treat you when compiling your quote. Remember, if you ever file a claim, you’ll be dealing with their insurance agents. If they’re respectful and take the time to understand your needs while you’re shopping, they’ll likely be helpful if you ever need to file a claim.

Once you have a few quotes, choose the provider that offers you the most comprehensive coverage at a price you can afford.

2. Not Reading the Terms of Each Policy

Even though many providers offer farm insurance, the terms of their policies will not be the same. This means you could end up getting a policy that doesn’t meet your needs or provide the types of coverage that will help you protect your business.

Never buy a policy without reading the terms in detail. Take your time and make sure you understand the coverage offered by the policy, the claims process, and the things each policy won’t protect against.

If you have any questions, no matter how small they seem, get them answered before you agree to the coverage. This will help you make the best decision for your business and ensures that you know exactly what you’re buying before you spend a dime.

3. Buying Too Little Coverage

Every farm insurance policy has coverage limits. These limits are the maximum amount that the insurance provider will pay out if you file a claim.

One of the most common mistakes people make when looking at their options for insurance is buying coverage with limits that are too low. When this happens, you’ll end up having to spend your savings to make up the difference.

Think about how much coverage you truly need. Consider how much it would cost to replace your equipment, buildings, and crops if they got damaged or destroyed.

Choose a policy that will cover the full cost of a replacement should you need to file a claim. This will protect your business completely and won’t leave you dipping into your savings if the worst happens.

4. Choosing Farm Insurance Based on Price Alone

As a business owner, your budget matters. If you end up spending more each month than you mean to, you’ll eat into your profits.

This leads many people to choose an insurance provider based on price alone. After all, the cheaper the coverage is, the more money you’ll have left at the end of the month. Unfortunately, choosing coverage on price alone is one of the worst mistakes you can make.

When it comes to farm insurance, you get what you pay for. Better, more comprehensive coverage costs more than bare-bones policies. However, the policies are more extensive and will better protect your farm as long as they’re in place.

Instead of basing your decision on price, look at the coverage details. Make sure they meet or exceed your needs as a business owner. It may cost more, but your farm will be in better hands.

5. Thinking Your Coverage Needs Won’t Change

Insurance coverage is one thing that you need to review every year, especially as a business owner. As your farm grows and you acquire more equipment, change crops, or shift your business operation, your insurance needs change.

The coverage you purchased the year before may not be enough to keep up with your current needs.

Instead of making the mistake of assuming that your existing policy is enough, review your coverage needs every year. If you’re not sure what’s changed, talking with insurance agents can help you identify potential shortcomings in your coverage.

If it seems that your current coverage is too low, invest in a larger policy.

6. Not Asking for Discounts

It’s normal to think that the price you’re quoted when shopping for insurance is set in stone. However, that’s not always the case.

Some farms may qualify for discounts on coverage, but the only way to find out if yours does is to ask your insurance agent. If you don’t qualify for discounts currently, see if there are any improvements you can make around your farm to qualify in the future.

This will help you prioritize your upgrades so you can save more money in the long-run.

Avoid These Mistakes at All Costs

Choosing farm insurance doesn’t have to be the most difficult part of running your business. Avoid these common mistakes and you’ll be able to find a policy that fits your needs and your budget for years to come.

Just remember to work with an experienced farm insurance provider to get the highest quality coverage possible.

If you need a quote for farm insurance or just want to speak with an insurance agent to make sure your current policy is working for you, don’t wait. Contact our team and let us help you find the best insurance for your farm and your unique needs.