NAVIGATING THE CHALLENGES
FARMOWNER ’ S INSURANCE
If you have unlicensed vehicles , perhaps these are older vehicles or ones you use infrequently — and even then , only on the farm — a farm owner ’ s policy may be a good fit . The rules are very particular concerning licensing requirements and how the vehicle is used , so check with your insurance advisor before moving forward on this option .
ADDITIONAL COST SAVING STRATEGIES
Farmers can employ several strategies to afford increasing insurance premiums for buildings and equipment when facing high input costs and low commodity prices . These include adopting precision agriculture , mitigating farm-related risk , diversifying your income streams , exploring new options for financial management , and working with your insurance advisor to adjust your policy , shop around , and negotiate .
PRECISION AGRICULTURE AND TECHNOLOGY ADOPTION
According to the US Government Accounting Office ( GAO ), somewhere between 20 % and 30 % of Minnesota farms are using precision agriculture practices . These practices can include remote sensing platforms , in-ground sensors , targeted spray systems , and automated mechanical weeders . The benefits of such practices run the gamut from reduced use of certain crop inputs like herbicides , water , and fertilizer ; limited use of chemicals and nutrients , leading to better environmental outcomes concerning runoff ; and improved profits through more efficient use of crop inputs .
RISK MITIGATION PRACTICES
Don ’ t overlook soil health when mitigating farm-related risk . Conservation practices like covering crops , no-tilling , and crop rotations to improve soil health which will lead to better yields and higher profits . We also recommend utilizing integrated pest management ( IPM ) techniques to manage pests and reduce pesticide costs . According to the US Environmental Protection Agency ( EPA ), an IPM program uses a four-tiered approach : set action thresholds , monitor and identify pests , prevention , and control . Installing an IPM program on your farm can lead to more economical pest management and reduced hazards to the people and land in your farming environment .
DIVERSIFICATION
Diversify income streams by adding other enterprises beyond traditional crop production to your farm business such as agritourism activities , selling some of your harvest at farmers markets , or offering pick-your-own events on your farm . You may also consider growing a variety of crops or raising multiple types of livestock to reduce exposure to any single market .
FINANCIAL MANAGEMENT
Exploring new options for managing your money can help alleviate some financial pressure , which will make it easier to afford your insurance premiums . Work with your banking institution and your financial advisor to buffer against income variability by maintaining cash reserves and accessing lines of credit . You might also utilize marketing tools like forward contracts or futures hedging to lock in favorable prices .
POLICY ADJUSTMENTS
You should be reviewing and adjusting your agricultural insurance policy with your insurance advisor each year to ensure an optimal balance between premiums and protection . To save on premiums , you may consider higher deductibles , which can be beneficial as long as you have the reserves to cover them in the event of a claim .
SHOP AND NEGOTIATE
You have power over whom you choose to carry your agricultural insurance policy . Don ’ t hesitate to shop around with different insurance providers and negotiate for better rates , especially for bundled policies covering multiple risks . An independent insurance agent like Nesbit can help you compare options from multiple carriers so you don ’ t have to spend your time going from carrier to carrier for a quote .
By implementing these strategies , farmers can better manage the increasing insurance costs amidst high input expenses and low commodity prices .
A NOTE FROM NESBIT
As your insurance advisors , we acknowledge our responsibility to help you manage your agricultural insurance costs and prevent situations that may result in you having to file a claim . We do not take this responsibility lightly . Some insurance agencies may sign off once the policy is signed and their commission is in pocket , but that ’ s not what you ’ ll get with a family agency like Nesbit . At Nesbit , we follow up with resources and offer ongoing guidance to help you reduce risk exposures , so when it comes time to renew , your premiums are significantly lower .
Phone 952-941-9418 or email us at info @ NesbitAgencies . com to book a free evaluation and quote . +
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