Adam Duliban on The Importance of Cash Crop Insurance
Adam Duliban is a third generation co-owner of Duliban Insurance Brokers Inc. He wrote an article for the OSCIA Regional Newsletter discussing the perfect cash crop insurance program.
Duliban Insurance Brokers has been a trusted, local family business in Haldimand and Niagara since 1976. They have an emphasis on protecting our local communities with competitive insurance premiums, tailored coverages and service from your local, trusted Insurance Broker.
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Duliban Provides Premium Farm Insurance for Haldimand and Niagara Farms
Duliban Insurance Brokers provides tailored farm insurance programs at the most competitive premiums for all of our valued customers.
Our local insurance brokers are valued community members who love supporting our communities and local farms.
We value your business and will consistently shop your coverage with our 20 different insurance companies and have them compete for your business.
Adam Duliban’s article will discuss the importance of protecting your cash crop farm with with the best coverage possible. If you are interested in protecting your farm, get in touch with us today.
Adam’s Article: The Best Cash Crop Insurance Program
At Duliban Insurance Brokers, we work with the province’s top rated farm insurance carriers and have them compete against each other to provide tailored farm insurance programs for our clients. We customize this to meet every farm’s needs and, in many cases, we are able to provide significant increases in coverage while providing thousands of dollars in premium savings.
During our review process we often come across common issues pertaining to missing coverages, inadequate limits, and deductibles. We achieve and contribute to our long standing client relationships through frequent contact and advice for the best farm insurance protection.
One of the issues we encounter time and time again when we discuss and review coverage with cash crop farmers, is that harvested produce, with potentially huge value, is either not insured at all or is severely underinsured.
As your on-farm storage capacity grows over the years, it is easy to neglect thinking about the cost of the additional storage capacity and the increased value of the produce inside.
In our review process, our team will often discover that additional storage has been added in the recent past and neither the bin itself, nor the increased produce values, have been acknowledged in the farm insurance program. This can eventually result in an unpleasant situation for everyone, where there is not enough insurance to completely cover a claim.
The farmer’s thought process is often explained as “I don’t hold produce for very long,” “the values change so often it is difficult to set a real insurance limit,” or “I don’t want to be insurance poor, so I took that risk myself.”
Our office farm insurance professionals agree with the philosophy that assuming some risk yourself is a reasonable cost saving option, however, we always propose that there are alternatives to leaving assets either uninsured or underinsured.
We emphasize and encourage insuring all the farm assets for their full value, and placing a substantial deductible on the insurance policy to keep the premium cost down. The client accomplishes his goal of assuming additional risk himself, but there is proper coverage for a disastrous loss, and a relatively manageable deductible in the event of a claim.
Since we never know when a loss might happen, it is important to think about the worst case scenario.
Imagine that you’ve just finished the harvest and your entire crop is in the bins. You need to sell that crop to fund your input costs, to pay the machinery loans, the truck loans, the farm mortgages, to feed the family and establish a financial foundation for future years.
If a fire destroyed your grain storage complex at this exact moment, how could you possibly recover from a whole season’s lost income without sufficient insurance coverage? How would you cope with the additional costs of safeguarding any undamaged crop?
It is easy and convenient to properly insure your harvested produce by using a monthly reporting form. The insurance limit for produce is set by calculating the real maximum value of the produce in storage, and this limit of coverage is always in place for the whole term of the policy. A deposit premium is initially charged based on this maximum limit.
To assist in making the reporting process as easy as possible, our farm insurance service team will call or email you at the beginning of every month to ask you to provide the current value of the produce, which will fluctuate due to price changes and the amount of the crop you have already sold. At the end of the policy term the insurer will do a calculation based on the average actual values that were at risk, and the premium is adjusted accordingly.
In this way, you have full coverage for the worst case scenario, but pay a premium only for the coverage you actually required. Even in a season like the one we are now enduring, when yields are low, the final premium will be based on the actual values that were at risk.
Extra expense insurance is an inexpensive but potentially valuable coverage in the event of an insured loss to your grain handling and storage facility. This additional insurance would provide reimbursement for the additional costs of transporting, drying, and storing of your produce in other locations while your facility is being rebuilt.
It is also important to periodically review the limits of insurance on farm machinery.
As pieces of equipment are bought, sold, and traded from time to time, these changes need to be reported to your insurance provider. The insurance limit for recent model equipment can be set at the original purchase price for items that are less than 5 model years of age, as claims for losses on this new equipment will be settled without depreciation.
As the equipment gets older, the limit can be reduced to the comparable advertised value of similar used equipment. This coverage adjustment is typically part of our annual review process with our clients.
One more component of your coverage is essential, especially for those who farm multiple parcels of land. Your farm liability insurance requires regular review and maintenance too.
The liability coverage provided by your policy needs to be extended to all the parcels of land you own or rent, and the insurer will charge a small additional premium for each of these. Of course, you may add and delete specific parcels periodically as the situation changes, but it is important that this be reviewed regularly to be accurate in the event of an incident.
The more locations you have, the more exposure there may be to a roadway incident as you and your machinery travel from farm to farm. It is always a good idea to consider a higher farm liability insurance limit to better protect your farm assets. The peace of mind is well worth the relatively small additional premium.
Cash Crop Insurance Q & A with Adam Duliban
Why do I need Cash Crop insurance?
One of the issues we encounter time and time again when we discuss and review coverage with cash crop farmers, is that harvested produce, with potentially huge value, is either not insured at all or is severely underinsured.
As your on-farm storage capacity grows over the years, it’s easy to overlook the cost of the additional storage capacity and the increased value of the produce inside.
In our review process, our team will often discover that neither the bin itself, nor the true produce values have been acknowledged in the farm insurance program. This can eventually result in an unpleasant situation for everyone, where there is not enough insurance to completely cover a claim.
How do I determine how much coverage I need?
It’s easy and convenient to properly insure your harvested produce by using a monthly reporting form. The insurance limit for produce is set by calculating the real maximum value of the produce in storage, and this limit of coverage is always in place for the whole term of the policy. A deposit premium is initially charged based on this maximum limit.
To assist in making the reporting process as easy as possible, our farm insurance service team will call or email you at the beginning of every month to ask you to provide the current value of the produce, which will fluctuate due to price changes and the amount of the crop you have already sold. At the end of the policy term, a calculation is made based on the average actual values that were at risk, and the premium is adjusted accordingly.
In this way, you have full coverage for the worst-case scenario, but pay a premium only for the coverage you actually required. When yields are low, the final premium will be based on the actual values that were at risk.
What is extra expense insurance?
Extra expense insurance is an inexpensive but potentially valuable coverage in the event of an insured loss to your grain handling and storage facility. This additional insurance would provide reimbursement for the additional costs of transporting, drying, and storing of your produce in other locations while your facility is being rebuilt.
