Your insurance should work as hard as you do. A farm owners insurance policy covers your property and provides liability coverage for both your home and your farming operations. While farm policies differ, in general there are four areas of protection:

• Home and contents
• Farm personal property
• Farm structures
• Liability protection
• Optional coverages

Causes of Loss

It’s important to understand which causes of loss your policy covers. At Bagwell Insurance Group, we can explain which losses are covered within each property classification. in some categories, you will have coverage options. These options include:

Basic coverage

• Windstorm and Hail
• Fire and Lightning
• Explosion
• Riot and Civit Commotion
• Sinkhole Collapse
• Smoke
• Theft
• Vandalism
• Vehicles
• Volcanic Action
• Collision
• Damage in course of Transit

Broad coverage – all basic coverages, plus:

• Accidental discharge and leakage of water system
• Accidental shooting of livestock
• Artificially generated electrical current (applies only to household personal property)
• Attacks on livestock (except to sheep) by dogs/wild animals
• Earthquake loss to livestock
• Breakage of glass that’s part of a building or structure
• Bursting of heating or water systems
• Collapse
• Electrocution of livestock
• Falling objects
• Flood loss to livestock
• Freezing of plumbing, heating, AC, and automatic fire protection system, components, and household appliances.
• Loading/unloading accidents.
• Sudden and accidental collision damage causing death of livestock.
• Sudden and accidental tearing apart of heating, AC, or water system.
• Weight of ice, snow, and sleet.

Special coverage – Provides coverage for risks of direct physical loss to eligible property, unless excluded by the policy language.

Determining Property Value

You may insure your property for its Replacement Cost (RC) or for its Actual Cash Value (ACV). Eligibility for these valuation options may be determined by your insurer’s underwriting guidelines.

Replacement Cost (RC)

Pays the actual amount to replace the damaged property at the time of loss, with materials of like kind and quality, without deduction for depreciation. Payment is capped at the limit of insurance shown for that piece of property.

Actual Cash Value (ACV)

Pays the cost to replace the property at the time of loss, reduced to reflect depreciation.

Valuation Example

A roof suffers $50,000 in damage. It had a life span of 30 years and was 15 years old at the time of loss. The RC payment would be $50,000. However, if the building had an insured limit of $20,000, that amount is the most that would be paid. If insured for ACV, payment would be 1/2 of the cost to repair, due to the 15 years of depreciation, or $25,000. If the building had an insured limit of $20,000, that amount is the most that would be paid.

Coinsurance

You agree to insure your property for a minimum amount. If it is insured for a lower amount, the company pays only a percentage of the loss, determined by dividing the limit of insurance purchased by the amount that should have been purchased in order to comply with the minimum.

Deductible

A deductible allows you to reduce your premium by paying a set amount up front, before the insurer pays, for each covered loss. Work with your agent to arrive at a deductible that you can afford and that generates the greatest premium savings.

For more information on farm and ranch insurance, please contact Wendell Bagwell, William DeLaPerriere, TJ Smith or Matt Adams.