Rethinking Farm Insurance In Light Of A Global Pandemic

Farmers around the world are feeling the pinch of COVID-19 and what it means for their farms. In the U.S., the growing season is rapidly approaching. At a time when farmers need to be preparing and planting fields, workers are scarce. With the uncertainty about when the country will be declared "open for business" once again, there is genuine fear for American farmers. Even those who have robust farm insurance policies are learning that viruses and pathogens are explicitly excluded from most "business interruption" protections, so what does that mean for farmers today — and in the future?

Farm Insurance Benefits

Farm insurance offers farmers many benefits and protections from likely occurrences. A global pandemic on the scale of COVID-19 caught everyone unprepared. There hadn't been anything remotely similar in more than a century. Many people believed modern medicine had these types of pandemics licked, proclaiming them to be less science and more science-fiction — fodder for blockbuster movie plots.

Traditional farm insurance provides protection from a wide range of events that are likely to affect farmers. Multiple peril crop insurance (MPCI), for instance, offers protection such as:

  • Flood
  • Drought
  • Fires
  • Storm Damage
  • Insects
  • Frost
  • Blight

However, farmers in areas where hail is likely will often need to purchase a separate hail policy. It is in the best interest of farmers to purchase hail riders to their farm insurance because they have no deductibles, making them more cost-effective should you need to file a claim. The deductible on an MPCI policy alone could be greater than the total claim for hail damage.

Crop Revenue Insurance

Even crop revenue insurance is in a somewhat gray area when it comes to global pandemics. This type of protection usually provides protection against things like lower than expected crop yield or low crop prices at the time of harvest. This type of coverage is designed to protect farmers against swings in crop prices. Crop revenue insurance as part of an overall farm insurance plan has been instrumental in helping to protect farmers from marketing swings for years, at this point.

For farmers, one thing is certain, now, before you plant your crops for the season, is the time to work with your insurance provider to determine the best route to protect yourself, your farm, and your crops throughout the uncertainty ahead. Specifically ask questions about coverages, protections, and exclusions that could affect your farm during the current pandemic and if future global catastrophes such as this occur.

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